(2_FIDELITY_LOGOS)FIDELITY
INTERNATIONAL EQUITY
FUNDS
Broadly Diversified Funds
FIDELITY DIVERSIFIED INTERNATIONAL FUND
FIDELITY INTERNATIONAL GROWTH & INCOME FUND
FIDELITY OVERSEAS FUND
FIDELITY WORLDWIDE FUND
Regional/Single Country Funds
FIDELITY CANADA FUND
FIDELITY EUROPE FUND
FIDELITY EUROPE CAPITAL
APPRECIATION FUND
FIDELITY JAPAN FUND
FIDELITY PACIFIC BASIN FUND
Emerging Markets Funds
FIDELITY EMERGING MARKETS FUND
FIDELITY LATIN AMERICA FUND
FIDELITY SOUTHEAST ASIA FUND
SEMIANNUAL REPORT
APRIL 30, 1994
CONTENTS
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PRESIDENT'S MESSAGE NED JOHNSON ON OVERSEAS INVESTING.
BROADLY DIVERSIFIED FUNDS
DIVERSIFIED INTERNATIONAL FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
INTERNATIONAL GROWTH & INCOME FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
OVERSEAS FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
WORLDWIDE FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
REGIONAL/SINGLE COUNTRY FUNDS
CANADA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EUROPE FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EUROPE CAPITAL APPRECIATION FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT SUMMARY
INVESTMENTS
FINANCIAL STATEMENTS
JAPAN FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
PACIFIC BASIN FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
EMERGING MARKETS FUNDS
EMERGING MARKETS FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
102 INVESTMENTS
FINANCIAL STATEMENTS
LATIN AMERICA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
SOUTHEAST ASIA FUND PERFORMANCE
FUND TALK: THE MANAGER'S OVERVIEW
INVESTMENT CHANGES
INVESTMENTS
FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
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THIS REPORT AND THE FINANCIAL STATEMENTS CONTAINED HEREIN ARE SUBMITTED FOR
THE GENERAL INFORMATION OF THE SHAREHOLDERS OF THE FUNDS. THIS REPORT IS
NOT AUTHORIZED FOR DISTRIBUTION TO PROSPECTIVE INVESTORS IN THE FUNDS
UNLESS PRECEDED OR ACCOMPANIED BY AN EFFECTIVE PROSPECTUS. NEITHER THE
FUNDS NOR FIDELITY DISTRIBUTORS CORPORATION IS A BANK AND FUND SHARES ARE
NOT BACKED OR GUARANTEED BY ANY BANK OR INSURED BY THE FDIC.
PRESIDENT'S MESSAGE
DEAR SHAREHOLDER:
After posting strong gains in 1993, several foreign markets suffered
corrections shortly after the new year began. Hardest hit were markets in
the Far East - except for Japan - and Latin America. In some cases, markets
with the greatest declines in early 1994 were among the previous year's
strongest performers.
What happened? Stock prices in emerging markets such as Brazil, Malaysia
and Singapore rose dramatically in 1993. For example, the Morgan Stanley
Emerging Markets Free Index was up 73.21% for the year. Corporate earnings
in many of these countries grew quickly, as governments took positive steps
to improve their economies. The prospects of these economies clearly
captured the imagination of U.S. investors, and in 1993 alone, more than
$38 billion flowed into international equity funds. This was up from just
$7 billion in 1992.
While these markets rewarded investors in 1993, the corrections of early
1994 demonstrated that volatility is a fact of life in international
markets. Morgan Stanley Capital International showed that Turkey, for
example, declined more than 68% in U.S. dollars in the first four months of
1994 alone. In Brazil, the market soared more than 352% in local currency;
but when converted to dollars, made a dollar gain of about 11%.
How will these markets perform next month or next year? In some ways,
foreign stock prices act like the stock prices of smaller companies in the
U.S.; a change in sentiment or profit taking in relatively small markets
can lead to a quick drop in prices. Inversely, countries and regions can
come into favor so
quickly that their prices can shoot up much higher than fundamentals may
suggest. The extent of these extremes is often, but not always, tied to a
market's size and level of development; the more developed a market, the
less volatile it is likely to be, and vice versa.
In view of these factors, here are some principles you may wish to keep in
mind:
First, take a long-term approach when investing in stocks, particularly
overseas. If you can afford to leave your money invested through the
inevitable ups and downs of foreign markets, you will reduce your
vulnerability to any single decline. As you can see from the chart below, a
broad measure such as the Morgan Stanley Europe, Australia and Far East
(EAFE) Index can be more volatile from year to year than the Standard &
Poor's 500 index, which tracks the performance of U.S. stocks. Yet on a
cumulative basis, the EAFE out-performed the S&P 377.73% to 297.92% for
the 10 years ended April 30, 1994.
Second, you may want to consider certain international stocks to be
higher-risk when compared to the New York Stock Exchange Composite Index.
Remember that even within the international part of your investments you
can reduce - but not eliminate - risk by spreading your investments across
many countries or regions. Finally, keep in mind the effects of currency
fluctuations, which can have a significant impact on returns - as we saw in
the example of Brazil.
Although it's never easy to watch stock prices fall, market declines are a
normal part of investing, whether overseas or at home. After market
downturns, some investors question the wisdom of their investments. That's
why I think it is important to review these principles periodically.
To ignore the potential of international markets would be to forego the
opportunities that exist there. Before you let your imagination run too
far, remind yourself that international investing may be a bumpy ride.
Best regards,
Edward C. Johnson 3d
S&P 500 EAFE
* YEAR TO DATE THROUGH APRIL 30, 1994
Row: 1, Col: 1, Value: 22.38
Row: 1, Col: 2, Value: 23.69
Row: 2, Col: 1, Value: 6.1
Row: 2, Col: 2, Value: 7.38
Row: 3, Col: 1, Value: 31.57
Row: 3, Col: 2, Value: 56.16
Row: 4, Col: 1, Value: 18.56
Row: 4, Col: 2, Value: 69.44000000000001
Row: 5, Col: 1, Value: 5.1
Row: 5, Col: 2, Value: 24.63
Row: 6, Col: 1, Value: 16.61
Row: 6, Col: 2, Value: 28.27
Row: 7, Col: 1, Value: 31.69
Row: 7, Col: 2, Value: 10.53
Row: 8, Col: 1, Value: -3.1
Row: 8, Col: 2, Value: -23.45
Row: 9, Col: 1, Value: 30.47
Row: 9, Col: 2, Value: 12.13
Row: 10, Col: 1, Value: 7.619999999999999
Row: 10, Col: 2, Value: -12.17
Row: 11, Col: 1, Value: 10.08
Row: 11, Col: 2, Value: 32.56
Row: 12, Col: 1, Value: -2.56
Row: 12, Col: 2, Value: 7.89
%
DIVERSIFIED INTERNATIONAL
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Diversified
International has a 3% sales charge, which has been waived since the fund's
start on December 27, 1991 through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
DIVERSIFIED INTERNATIONAL 7.57% 17.09% 23.21%
Morgan Stanley GDP-
weighted EAFE Index 9.19% 21.20% 37.44%
Average International Fund 6.70% 21.97% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on December 27, 1991. You can compare the fund figures to the
performance of the Morgan Stanley GDP-weighted EAFE index - a broad
measure of the performance of stocks in Europe, Australia, and the Far
East, weighted by each country's gross domestic product. You can also
compare the fund's performance to the average international fund which
reflects the performance of 170 funds with similar objectives tracked by
Lipper Analytical Services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
DIVERSIFIED INTERNATIONAL 17.09% 9.31%
Morgan Stanley GDP-
weighted EAFE Index 21.20% 14.52%
Average International Fund 21.97% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Diversified Int'l (325) MS GDP-Weighted EAFE
12/27/91 10000.00 10000.00
12/31/91 10060.00 10275.57
01/31/92 9860.00 10188.63
02/29/92 9680.00 10050.14
03/31/92 9140.00 9554.95
04/30/92 9240.00 9638.28
05/31/92 9750.00 10205.78
06/30/92 9540.00 9873.69
07/31/92 9190.00 9524.06
08/31/92 9350.00 9997.89
09/30/92 9140.00 9631.08
10/31/92 8460.00 9240.11
11/30/92 8460.00 9285.20
12/31/92 8671.06 9283.63
01/31/93 8873.42 9391.13
02/28/93 9176.95 9719.67
03/31/93 9915.56 10383.39
04/30/93 10522.64 11339.71
05/31/93 10785.70 11516.97
06/30/93 10482.17 11317.62
07/31/93 10805.94 11658.22
08/31/93 11362.42 12512.58
09/30/93 11210.66 12250.09
10/31/93 11453.49 12586.98
11/30/93 11028.53 11584.19
12/31/93 11850.64 12399.01
01/31/94 12739.44 13347.09
02/28/94 12484.04 13273.82
03/31/94 12085.61 13083.23
04/30/94 12320.58 13744.12
Let's say you invested $10,000 in Fidelity Diversified International Fund
on its start date. By April 30, 1994, it would have grown to $12,321 - a
23.21% increase on your initial investment. That compares to $10,000
invested in the Morgan Stanley GDP-weighted EAFE index, which would have
grown to $13,744 over the same period - a 37.44% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
DIVERSIFIED INTERNATIONAL
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Greg Fraser,
Portfolio Manager of Fidelity Diversified International Fund
Q. GREG, HOW DID THE FUND PERFORM?
A. The fund did moderately well compared to other international funds for
the six month period. It was up 7.57% during the six months through April
30, versus a 6.70% total return for the average international fund tracked
by Lipper Analytical Services. However, it trailed the Morgan Stanley
GDP-weighted EAFE index, a measure of stock performance in Europe,
Australia and the Far East that is adjusted to reflect the size of each
country's economy. The total return for the index was 9.19%. For the 12
months ended April 30, the fund returned 17.09%, compared to 21.20% for the
EAFE index and 21.97% for the average fund.
Q. WHY DID THE FUND TRAIL THE GDP-WEIGHTED EAFE INDEX?
A. I can answer that in two words: Italy and Japan. They were two of the
best-performing international markets, and the fund was underweighted in
both of them - as were most funds. During the period, the fund had as
little as 17% of its assets in Japanese stocks, which account for about 30%
of the GDP-EAFE index. In Italy, which accounts for 12% of the GDP-EAFE
index, the fund's holdings were around 4% of its total investments.
Q. WHY DID YOU LIMIT YOUR JAPANESE AND ITALIAN INVESTMENTS?
A. I rely partly on sophisticated computer models to evaluate data about
factors such as stock valuations - prices compared to other measures such
as earnings - and corporate earnings in different markets. Although many
stocks in Japan looked moderately cheap at the start of this period,
earnings estimates kept falling so I didn't invest heavily there. More
recently, projected earnings growth for many Japanese companies looked
better, and I gradually boosted the fund's exposure to around 28% of its
total investments. In fact, the fund's largest holdings include shares of
electronic equipment manufacturers Hitachi, Matsushita and Sony. All three
of those companies have been diligent about cutting costs, so their
earnings could be surprisingly strong over the next several years.
Meanwhile, the stocks look very inexpensive. In Italy, stock prices were
affected by psychological factors such as the country's March elections,
which don't show up in our quantitative models. Even so, our 4% stake in
Italy is fairly high compared to some other international funds. The fund's
largest holdings include Stet (Societa Finanziaria Telefonica), the holding
company for Italy's telephone operating company.
Q. AFTER JAPAN, THE FUND'S LARGEST SINGLE COUNTRY INVESTMENTS WERE IN
FRANCE AND GERMANY. WHY?
A. In France, interest rates have declined and I think the country's
economy is beginning to recover from recession. In addition, the French
government is making plans to sell off its ownership in a number of large
firms such as Credit Lyonnais, the large banking company. Such
privatization programs often tend to boost stock prices. As for Germany,
most investors are avoiding the German stock market now because wages have
increased and productivity has declined, in part due to the after-effects
of German reunification. But while that might be true for Germany as a
whole, it's not necessarily true for every German company. For example,
labor costs are a relatively small portion of expenses for chemical
companies such as Bayer AG, which is one of the fund's largest investments.
Q. YOU ALSO HELD SHARES OF DEUTSCHE BANK, THE LARGE GERMAN BANK. HOW DID
THAT STOCK PERFORM?
A. The shares declined in value after it was disclosed that the bank had
made loans to a German developer who fled the country. That's a good
example of the kinds of risks you sometimes encounter overseas. However, I
believe that the stock will be a solid performer as the German economy
emerges from its doldrums. One reason is that Deutsche Bank owns stock in
many German blue chips - for example, it has a sizable stake in
Daimler-Benz, the largest German auto company - and thus offers broad
exposure to the German economy.
Q. ANY OTHER DISAPPOINTMENTS DURING THE PERIOD?
A. The fund held shares in some firms that failed to deliver on investors'
profit expectations and their stock prices suffered. They were generally
small companies such as Culturcom Holdings, a Hong Kong publisher of comic
books; and Dreco Energy Services, a Canadian oil services company.
Q. SIX MONTHS AGO, THE FUND'S LARGEST CONCENTRATION OF INVESTMENTS APART
FROM JAPAN WAS IN GREAT BRITAIN. WHAT CHANGED?
A. The U.K. came out of its recession earlier than the rest of Europe, and
that boosted stock prices. As the market became more expensive I shifted
some of the fund's assets from the U.K. to countries with more attractive
opportunities.
Q. THE FUND'S INVESTMENT IN EMERGING MARKETS OTHER THAN HONG KONG REMAINS
UNDER 5% OF ITS TOTAL HOLDINGS. DO YOU PLAN TO INCREASE THAT INVESTMENT?
A. Yes, but I will do so in a prudent way, taking advantage of market
pullbacks to buy shares inexpensively. Although Hong Kong might be
considered a more developed market, it's worth noting that I started to add
to the fund's investments in that market as share prices declined during
the past several months.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. I have been making modest use of currency forward contracts. While that
is my only use of derivatives currently, I might use them more in the
future depending on market conditions.
Q. WHAT'S THE OUTLOOK FOR THE FUND?
A. I have become more optimistic than I was six months ago. As stock prices
in many overseas markets have retreated from their peaks, more attractively
priced opportunities have appeared. Also, overseas markets have tended to
outperform the U.S. market in three- to four-year cycles, and we are now
just entering the third year. I think there is still room for foreign
stocks to outperform U.S. stocks for the next year or two.
FUND FACTS
GOAL: to increase the value of the fund's shares
by investing mainly in countries included in the
Morgan Stanley GDP-weighted EAFE (Europe,
Australia, Far East) index, with help from
quantitative computer models
START DATE: December 27, 1991
SIZE: as of April 30, 1994, more than $333 million
MANAGER: Gregory Fraser, since December
1991; manager, Fidelity Select Defense and
Aerospace Portfolio, 1989-1990; and Fidelity
Select Environmental Services Portfolio, 1991;
joined Fidelity in 1986
(checkmark)
GREG FRASER ON THE FUND'S STRATEGY:
"Our goal is the same as most funds' goals: to find
cheap stocks of companies with strong finances and
good prospects. But I do it in a slightly different way,
using quantitative techniques. I rely on models that
analyze historical data about stock prices, interest
rates, earnings growth and inflation in each market
and then compare that data to current conditions. The
models also look at individual stocks, to find issues
that are trading at low prices relative to factors such as
their earnings and sales. And they consider the
companies' prospects for future profit growth. Finally, I
consult Fidelity's analysts, who add their judgment to
the models' conclusions. Often, the analysts can add
an element of knowledge or judgment that will
supersede the models. Based on all of that, I decide
which stocks are most attractive now."
(bullet) As of April 30, 1994, the fund's investments were
divided among stocks in more than 30 countries in
Europe, Japan, and elsewhere.
(bullet) About 28% of the fund's investments were in
Japanese stocks. European stock markets accounted
for 49.4% of the fund's investments. The fund also
held a 7.7% stake in emerging markets including
Hong Kong.
(bullet) The fund's largest industry sector was finance,
which accounted for 17.9% of its total investments on
April 30, 1994. The second-largest sector was
durables (12%).
DIVERSIFIED INTERNATIONAL
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 7.0%
Australia 4.7%
United
Kingdom 7.2%
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 7.2
Row: 1, Col: 3, Value: 3.7
Row: 1, Col: 4, Value: 22.4
Row: 1, Col: 5, Value: 3.3
Row: 1, Col: 6, Value: 28.0
Row: 1, Col: 7, Value: 4.4
Row: 1, Col: 8, Value: 9.0
Row: 1, Col: 9, Value: 10.3
Row: 1, Col: 10, Value: 4.7
France 10.3%
Switzerland 3.7%
Germany 9.0%
Italy 4.4%
Other 22.4%
Netherlands 3.3%
Japan 28.0%
AS OF OCTOBER 31, 1993
United States 11.6%
Australia 5.0%
Row: 1, Col: 1, Value: 11.6
Row: 1, Col: 2, Value: 13.1
Row: 1, Col: 3, Value: 4.4
Row: 1, Col: 4, Value: 3.5
Row: 1, Col: 5, Value: 18.9
Row: 1, Col: 6, Value: 18.5
Row: 1, Col: 7, Value: 10.3
Row: 1, Col: 8, Value: 8.800000000000001
Row: 1, Col: 9, Value: 5.9
Row: 1, Col: 10, Value: 5.0
Canada 5.9%
United
Kingdom 13.1%
France 8.8%
Switzerland 4.4%
Germany 10.3%
Spain 3.5%
Japan 18.5%
Other 18.9%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 92.5 87.8
Bonds 0.5 0.6
Short-term investments 7.0 11.6
TOP TEN STOCKS
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% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Hitachi, Ltd.
(Japan, Electronics) 2.2 0.2
Matsushita Electric Industrial Co. Ltd.
(Japan, Consumer Electronics) 1.9 1.1
Deutsche Bank AG
(Germany, Banks) 1.8 1.5
Sony Corp.
(Japan, Consumer Electronics) 1.7 0.9
Stet (Societa Finanziaria Telefonica Spa) Ord. 1.5 0.5
(Italy, Telephone Services)
Bayer AG
(Germany, Chemicals & Plastics) 1.4 1.0
Royal Dutch Petroleum Co.
(Netherlands, Oil & Gas) 1.3 -
Nomura Securities Co. Ltd.
(Japan, Securities Industry) 1.3 -
Nokia AB free shares
(Finland, Communications Equipment) 1.3 0.2
SIP Spa
(Italy, Telephone Services) 1.2 0.6
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TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 17.9 15.2
Durables 12.0 7.2
Technology 9.2 5.4
Basic Industries 8.4 9.1
Nondurables 7.2 7.1
Industrial Machinery & Equipment 6.2 4.7
Utilities 6.1 12.7
Energy 5.4 3.8
Retail & Wholesale 4.8 5.6
Construction & Real Estate 4.6 4.4
DIVERSIFIED INTERNATIONAL
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 90.1%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.8%
Banco de Galicia Y Buenos Aires SA
sponsored ADR representing Class B
shares 50,000 $ 1,518,750 05953820
Telecom Argentina Stet France 150,000 823,647 90899992
YPF Sociedad Anonima sponsored ADR
representing Class D shares 20,000 495,000 98424510
2,837,397
AUSTRALIA - 4.7%
Adelaide Brighton Cement Ord. 329,025 388,332 00699692
Advance Bank Australia Ltd. 150,000 1,040,761 00699210
Alcan Australia Ltd (b) 250,000 366,592 06099G92
Australia & New Zealand Banking
Group Ltd. (b) 658,286 2,217,805 05252810
Boral Ltd. Ord. 330,000 856,858 09950910
CSR Ltd. 400,000 1,373,376 12639610
Caltex Australia Ltd. 500,000 1,072,950 13199392
Commonwealth Bank of Australia (c) 100,000 587,977 20299492
Email Ltd. 230,285 817,026 29099292
Metal Manufactures Ltd. 400,000 1,101,564 60199B92
National Australia Bank Ltd. 300,000 2,549,328 63252510
Pioneer International Ltd. 100,000 206,006 72371110
QBE Insurance Group Ltd. Ord. 100,000 393,415 74799892
Santos Ltd. (b) 422,602 1,206,127 80302110
Weston (George) Foods Ltd. 150,000 863,725 96199F22
Westpac Banking Corp. 200,000 679,536 96121410
Westralian Sands Ltd. 145,700 416,877 96199A22
16,138,255
AUSTRIA - 0.2%
Verbund Gesellschaft 10,000 532,817 92299999
BELGIUM - 0.6%
Delhaize 13,000 520,663 24650010
Union Miniere SA (b) 20,000 1,521,704 90707392
Union Miniere SA (warrants) (b) 20,000 160,673 90707393
2,203,040
BRAZIL - 0.6%
Telebras PN (Pfd. Reg.) 60,000,000 2,163,428 95499792
CANADA - 1.4%
Abitibi-Price, Inc. 100,000 1,184,277 00368010
Canadian Pacific Ltd. Ord. 100,000 1,609,170 13644030
Dreco Energy Services Ltd. Class A (b) 20,000 185,000 26152820
FCA International Ltd. (b) 173,300 470,005 30290110
Germany Fund of Canada Trust 10,000 103,963 37390110
Intera Information Technologies Corp.
Class A (b) 24,000 112,823 45837K10
Midland Walwyn, Inc. (b) 150,000 1,193,317 59780110
4,858,555
FINLAND - 2.9%
Cultor OY, Series II Ord. (b) 30,000 795,303 23099093
Instrumentarium Class B (b) 63,000 1,681,898 45780510
Lassila & Tikahoja OY 14,000 436,483 66899D22
Metsa Serla B 20,000 840,109 59299992
Nokia AB free shares 50,000 4,293,888 65599992
Repola OY 49,100 872,653 75999A92
Tietotehdas OY B 60,000 1,041,735 93999892
9,962,069
FRANCE - 10.3%
Alcatel Alsthom CGE 12,000 1,452,810 01390492
Assurances Generales (Reg.) 8,000 767,762 04557510
Bertrand Faure SA (b) 1,075 108,108 08599392
Bon Marche (AU) SA 15,000 2,134,146 09799492
SHARES VALUE (NOTE 1)
CGIP 14,000 $ 2,956,875 12506610
Credit Commercial France Ord. (b) 277 1,248 22499398
Credit Local De France (c) 15,000 1,100,212 22699892
De Dietrich et CIE 6,000 2,969,247 24699293
Eridania Beghin SAY Group Ord. (b) 20,000 3,209,615 07720310
Essilor International SA 6,000 780,488 29728599
Eurafrance (Societe) (b) 100 36,939 29899892
Europeene de Prop (Sep) 24,455 1,638,113 29899792
Finextel 50,000 1,316,719 32299292
Generale des Eaux 32 14,614 37099210
IDIA (Inst. de Devel. des Ind. Agr.) 30,000 1,172,322 45199D22
Lafarge Coppee 25,000 2,028,102 50586310
Pechiney International 5,400 155,567 71099094
Pernod-Ricard 15,000 1,012,725 71404310
Peugeot SA Ord. (b) 10,000 1,581,831 71682510
Schneider SA (b) 20,833 1,671,648 80687410
Societe Generale Class A 20,000 2,255,214 83357799
Thomson C.S.F. 20,000 602,333 88431610
Total Compagnie Francaise des Petroles
Class B 49,228 2,862,498 20434510
UIC (Union Inds. de Credit) (b) 5,081 389,741 90299E92
Vallourec (b) 30,000 1,741,782 92017610
Zodiac SA (b) 3,193 1,256,207 96599492
35,216,866
GERMANY - 8.5%
Andrea Noris Zahn 10,000 2,318,621 03499892
Bayer AG 20,000 4,761,790 07273010
Colonia Verischerung AG 1,200 983,071 19619991
Commerzbank AG 10,000 2,170,496 20259710
Commerzbank (warrants) (b) 300 63,120 20299033
Deutsche Babcock AG 20,000 3,230,955 25159991
Deutsche Bank AG 13,000 6,140,024 25152592
Herlitz AG 4,000 1,013,301 42799392
Holsten Brauerei AG 2,666 918,755 43899D92
IKB AG (Deutsche Industriebank) 5,600 1,029,262 45999992
Karstadt AG 3,000 1,140,871 48576499
Kaufhof AG 2,000 659,008 48615210
New Germany Fund, Inc. (The) 100,000 1,250,000 64446510
Pfaff (GM) Ord (b) 8,000 1,257,557 71699592
Rosenthal AG 6,600 1,217,050 77774310
Thyssen AG Ord. 5,000 865,480 88629110
29,019,361
HONG KONG - 3.3%
Cafe de Coral Holdings Ltd. 1,000,000 618,150 12799092
Cathay Pacific Airways Ltd. 200,000 289,978 14890610
Cheung Kong Ltd. 350,000 1,653,785 16674410
Culturecom Holdings Ltd. 2,000,000 225,260 23099322
Dairy Farm International Holdings
Ltd. Ord. 550,000 804,562 23385910
Hang Lung Development Corp. 200,000 344,350 41099310
Hong Kong Electric Holdings Ord. 150,000 442,735 43858010
Hong Kong Land Holdings Ltd. 200,000 561,834 43858292
Hopewell Holdings Ltd. 1,000,000 893,240 44099999
Hutchison Whampoa Ltd. Ord. 350,000 1,438,566 44841510
Jardine Matheson & Co. Ltd. Ord. 24 157 47111510
Lai Sun Garment International Ltd. 300,000 563,130 50699093
Mandarin Oriental International Ltd. Ord. 400,000 522,996 56259499
Shun Tak Holdings Ltd. 685,244 731,841 82799192
Sime Darby Hong Kong Ltd. 200,000 321,048 82899392
Sing Tao Holdings Ltd. 250,000 343,055 82877099
Sun Hung Kai Properties Ltd. 200,500 1,206,940 86676H10
Winsor Industrial 300,000 442,737 97551099
11,404,364
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDIA - 0.1%
Reliance Industries Ltd. GDS (c) 30,000 $ 510,000 75947093
INDONESIA - 0.1%
Bank Dagang Nas Indonesia PT 275,000 401,687 06099Q22
IRELAND - 1.0%.
Bank of Ireland U.S. Holdings, Inc. 150,000 616,864 06278793
Crean (James) Ltd. Ord. 100,000 421,130 22699D25
Elan PLC ADR 12,400 407,650 28413120
IAWS Group PLC A (U.K. Reg.) 300,000 400,620 45399H23
Independent News 192,496 963,972 45399E92
Waterford Foods PLC Class A 300,000 464,355 94199392
3,274,591
ISRAEL - 0.3%
ECI Telecom Ltd. 50,000 1,031,250 26825810
ITALY - 3.6%
Fiat Spa 700,000 3,045,924 31562110
SIP Spa 1,376,010 4,117,462 78401792
Stet (Societa Finanziaria Telefonica
Spa) Ord. 1,300,000 5,041,855 85982510
12,205,241
JAPAN - 28.0%
Aichi Machine Industries 100,000 644,145 02299192
Aisin Seiki Co. Ltd. 50,000 595,883 00999999
Akita Bank 100,000 718,999 00999692
Aoyama Trading Co. Ord. 16,000 740,668 03799092
Aplus Co. Ltd. 150,000 812,568 03899A92
Bandai Co. Ltd. (warrants #3) 400 730,000 06099193
Canon, Inc. 100,000 1,625,135 13780199
Dai-Tokyo Fire & Marine Insurance Ord. 150,000 1,152,369 23399210
Daidoh Ltd. 150,000 1,366,591 56299292
Daiwa Securities 200,000 3,132,080 23499010
Ezaki Glicko Co. 75,000 805,180 30199492
Fuji Oil Co. Ltd. 150,000 1,375,455 35999310
Fuji Photo Film Co. Ltd. 50,000 1,078,499 35958610
Futaba Corp. 50,000 1,974,786 36399292
Hanshin Department Store 242,000 1,906,824 41199292
Hisamitsu Pharmaceutical Co. 70,000 675,662 46699092
Hitachi Ltd. 800,000 7,564,264 43357810
Honda Motor Co. Ltd. 100,000 1,654,683 43812810
House Food Industrial 55,000 1,159,263 44144610
Izumiya Co. Ltd. 100,000 1,881,217 46599310
Kao Corporation 250,000 3,028,662 48599210
Kasumi Stores 80,000 776,126 48599310
Kirin Brewery Co. Ltd. 200,000 2,403,230 49712510
Konica Corp. 109,000 719,295 50046M10
Matsushita Electric Industrial Co. Ltd. 400,000 6,579,336 57687910
Matsuya Denki Co. Ltd. 60,000 596,868 57699890
Mitsubishi Heavy Industry 200,000 1,329,656 60699310
Nakayama Steel Works Ltd. 100,000 633,310 62999310
Nippon Trust Bank Ltd. Ord. 150,000 749,040 66799892
Nissei Sangyo 100,000 1,408,451 66699592
Nomura Securities Co. Ltd. 200,000 4,353,394 65536130
Ohbayashi Corp. 200,000 1,359,204 67090410
Omron Corp. 100,000 1,585,738 68215110
Pokka Corp. 50,000 822,417 73299999
RICOH Co. Ltd. Ord. 200,000 1,701,960 76565999
Renown Look, Inc. 70,000 758,397 75999J22
Royal Co. Ltd. 165,000 2,437,703 77999110
Sekisui Chemical 200,000 2,048,656 81699210
Sekisui House Ltd. 150,000 1,876,293 81607810
Shintokogio Ltd. 80,000 619,324 97199392
Sony Corp. 100,000 5,673,200 83569999
TDK Corp. 75,000 3,383,236 87235110
SHARES VALUE (NOTE 1)
Takasago Thermal Engineering Co. 40,000 $ 618,536 87699892
Takeda Chemical Industries Ltd. 300,000 3,545,751 87405810
Takuma Co. Ltd. 70,000 1,041,071 87406099
Toenec Corporation. 55,000 666,306 96599592
Tokyo Style Co. Ltd. 150,000 2,733,183 88999410
Toshiba Corp. 250,000 1,895,992 89149310
Toyoda Boshoku Corp. 150,000 723,924 89799B92
Toyota Motor Corporation 200,000 3,920,024 89399999
Yamaha Motor Co. Ltd. 100,000 886,438 98456092
Yamatake Honeywell Co. Ltd. 130,000 2,074,264 98491099
Zenitaka Corp. 150,000 1,032,699 64099292
95,575,955
KOREA (SOUTH) - 0.6%
Samsung Electronics Co. Ltd.:
GDR representing common (b) (c) 1,516 69,357 79605060
GDS (c). 30,000 1,920,000 79605020
1,989,357
LUXEMBOURG - 0.7%
Minorco SA ADR 120,000 2,385,000 60434020
MEXICO - 0.8%
Banacci SA de CV Class C 40,000 271,363 06399893
Cemex SA, Series B 50,000 1,084,226 15299293
Groupo Televisa GDS (c) 10,000 528,125 40049J20
Grupo Carso SA de CV Class A-1 50,000 498,468 40099594
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 20,000 492,500 40048610
2,874,682
NETHERLANDS - 3.3%
Akzo NV Ord. 7,000 843,469 01019910
Borsumij Wehry NV 5,100 448,327 09985610
International Nederlanden Groep CVA 15,000 626,986 46099892
MacIntosh Confectionary Works 12,600 415,362 58199292
Philips Electronics 55,000 1,608,672 71833799
Pirelli Tyre Holdings NV Ord. 38,700 385,645 72499092
Royal Dutch Petroleum Co. 40,000 4,360,000 78025770
Telegraaf CVA 15,000 1,325,074 87940410
Twentsche Kabel Holding NV 10,000 1,104,228 91030099
Volmac Software Groep NV 27,700 337,204 92899292
11,454,967
NETHERLANDS ANTILLES - 0.1%
Intrum Justitia NV (Reg.) 160,000 262,224 46299292
NEW ZEALAND - 0.8%
Brierley Investments Ltd. 2,578,459 1,950,321 10901410
Fletcher Challenge Ltd. (Reg.) 350,000 681,044 33999592
Wrightson Ltd. 100,000 59,472 98299322
2,690,837
NORWAY - 2.2%
Bergesen Group Class A 50,000 1,109,390 08399010
Bonheur AS 14,000 275,464 09799399
Color Lines 130,815 529,386 19699492
Ganger Rolf 14,000 271,556 36472010
Helikopter Services 15,000 192,573 42499192
Norsk Hydro AS ADR (b) 15,000 508,125 65653160
Orkla AS Class B (non-vtg.) 20,000 633,538 39299192
Saga Petroleum AS B 100,000 1,102,413 84099794
Smedvig Tankships Ltd. Ord. (c) 40,000 365,000 83169E20
Unitor AS 60,500 1,207,282 91699392
Wilrig AS 310,800 1,236,070 97199092
7,430,797
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PANAMA - 0.1%
Banco Latino Americano de Exportaciones
SA Class E 10,000 $ 380,000 06199A92
PHILIPPINES - 0.3%
First Philippine Fund 50,000 893,750 33610010
PORTUGAL - 0.1%
Banco Portuguese Invest. SA:
(Reg.) 10,500 208,581 05999G93
(New) 1,400 27,811 05999G95
236,392
SINGAPORE - 0.2%
Hour Glass Ltd. 732,500 819,697 44199E22
SOUTH AFRICA - 0.2%
Rustenberg Platinum Holding Ltd. ADR 35,000 621,250 78307820
SPAIN - 2.7%
Argentaria Corp. Bancaria de ESP 4,200 182,507 21991392
Banco de Andalucia (Reg.) 2,000 226,555 08599193
Banco Popular Espanol 2,500 290,808 05999110
Corporacion Bancaria de Espana SA
sponsored ADR 60,000 1,305,000 21991310
Electric Zaragosa 7,500 207,242 29599192
Electricas Reunidas Zaragoza (New) 1,875 50,877 29599194
Growth Fund of Spain, Inc. 150,000 1,518,750 39987710
Hidro Cantabrico 40,000 1,244,940 42899999
Iberdrola SA 26,000 186,756 45499892
Repsol SA sponsored ADR 73,900 2,438,700 76026T20
Telefonica de Espana SA sponsored ADR 35,000 1,426,250 87938220
9,078,385
SWEDEN - 0.6%
Astra A Free 20,500 425,227 04632292
Frontline 114,000 306,809 35999F22
Mo Och Domsjoe (Modo) AB 20,000 787,701 61399792
SKF AB Ord. 5,300 109,241 78437530
Svenska Handelsbanken 30,000 464,744 86959991
2,093,722
SWITZERLAND - 3.7%
Also Holding AG (Reg.) 6,000 1,069,023 02199F93
Bank of International Settlements 100 762,570 06299B22
Bucher Holding AG (Bearer) 400 1,356,947 08699292
Ciba-Geigy AG (Reg.) 320 190,885 17199492
Ciba Geigy Corp. (warrants) (b) 120 855 17199494
George Fischer AG (Bearer) (b) 700 743,328 33771110
Industrieholding Cham AG (Reg.) 1,200 966,397 85599922
Nestle SA (Reg.) 1,000 835,976 64106992
Oerlikon-Buhrle Holding Ltd. (Reg.) (b) 10,000 1,069,023 67199092
Pelikan Holdings AG 5,000 447,208 70599A22
Prodega AG (Bearer). 1,000 1,211,560 74599992
Roche Holdings Ltd. Part. Cert. 200 957,845 77157092
Sandoz PC 100 264,405 80005220
Sulzer Gebrueder PC 1,000 709,831 86557799
Swiss Reinsurance Corp.:
(Reg.) (b) 1,100 468,802 87099393
A (warrants) (b) 1,000 3,385 87099D22
B (warrants) (b) 1,000 3,920 87099399
Winterthur Schweiz (Bearer) (b) 1,000 484,624 97629993
Zurich Versicherungs (Bearer) 1,000 930,050 99499592
12,476,634
THAILAND - 0.1%
Thai Euro Fund IDR 10 270,000
UNITED KINGDOM - 7.2%
Allied Lyons PLC (b) 90,000 801,696 01925510
Amstrad 600,000 291,360 03299110
SHARES VALUE (NOTE 1)
Associated British Foods Ltd. Ord. (b). 150,000 $ 1,358,922 04551910
B.A.T. Industries PLC Ord. . 90,000 640,537 05527010
British Petroleum PLC:
ADR 20,000 1,400,000 11088940
Ord. 3 18 11088910
British Telecommunications PLC Ord. 100,000 559,958 11102110
Cater Allen Holdings PLC 200,000 1,714,776 14899192
Cattles Holdings 333,917 749,944 14999B22
Clinton Cards PLC 100,000 235,213 18799292
East Midland Electricity PLC 70,000 590,080 27365394
Finlay (James) PLC 200,000 242,800 31799F92
Guinness PLC Ord. 100,000 727,641 40203310
Imperial Chemical Industries Ord. 110,000 1,370,455 45270440
Invesco Mim PLC 500,000 1,244,350 46199C92
Lilley PLC 300,000 17,073 53299692
Lloyds Chemists PLC 122,352 616,422 54099092
London & Manchester Group PLC 200,000 1,083,496 54190099
London International Group 300,000 478,014 54183310
Lonrho Ltd. Ord. 155,067 331,794 54337410
Manweb PLC 80,000 805,489 56508495
Northern Electricity PLC 50,000 469,666 68499B92
Norweb PLC 50,000 481,047 66934493
Peninsular & Oriental Steam
Navigation Co. 100,000 1,077,425 70719030
Royale Insurance Co. Ltd. 305,084 1,217,599 78074910
Scottish Metro Property PLC 100,000 147,198 80999292
Seeboard PLC 90,000 421,334 81570594
SmithKline Beecham PLC ADR 50,000 1,362,500 83237840
South Wales Electricity PLC 45,000 435,674 84060794
Standard Chartered Bank 45,461 689,871 85256810
Tesco PLC Ord. 44,939 143,209 88157510
Vodafone Group PLC 81,648 673,401 92857T92
Vsel Consortium PLC 40,000 603,965 91828599
Watmoughs (Holdings) PLC 230,000 1,588,065 95599492
24,570,992
TOTAL COMMON STOCKS
(Cost $283,063,996) 307,863,562
NONCONVERTIBLE PREFERRED STOCKS - 2.4%
AUSTRIA - 0.3%
Creditanstaldt Bank 17,000 999,441 22539210
BELGIUM - 0.2%
Cockerill Sambre SA 100,000 560,011 19199392
CANADA - 0.6%
Trilon Financial Corp. Class 1, Series A 192,200 2,154,552 89590330
GERMANY - 0.5%
Hornback Holdings AG 500 498,791 44050799
Wella AG 2,000 1,076,179 94599999
1,574,970
ITALY - 0.8%
Fiat Spa Privilege 1,000,000 2,784,210 31562120
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $6,262,232) 8,073,184
CORPORATE BONDS - 0.5%
MOODY'S PRINCIPAL VALUE (NOTE 1)
RATINGS (D) AMOUNT (A)
CONVERTIBLE BONDS - 0.4%
CANADA - 0.4%
Brascan Ltd. 7%, 10/15/02 - CAD 2,000,000 $ 1,403,052 105502AA
NONCONVERTIBLE BONDS - 0.1%
CANADA - 0.1%
Stelco, Inc. 10 7/8%, 9/15/94 - CAD 500,000 361,612 8585258Y
TOTAL CORPORATE BONDS
(Cost $1,606,578) 1,764,664
REPURCHASE AGREEMENTS - 7.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.56%
dated 4/29/94 due 5/2/94 $ 24,076,141 24,069,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $315,001,806) $ 341,770,410
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
28,861,200 DEM 5/13/94 $ 17,437,090 $ 157,004
(Payable amount $17,280,086)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.1%
CONTRACTS TO SELL
28,861,200 DEM 5/13/94 $ 17,437,091 $ (880,643)
2,678,400,000 JPY 7/11/94 26,490,223 (661,872)
TOTAL CONTRACTS TO SELL
(Receivable amount $42,384,799) $ 43,927,314 $ (1,542,515)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES -- 12.9%
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
DEM - German Deutsche mark
JPY - Japanese yen
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $5,573,171 or 1.7% of net
assets.
4. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $196,010,859 and $125,285,532, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $7,120 for the period (see Note 4 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $3,190,000. The weighted average interest rate was
4.19%. Interest expense includes $1,113 paid under the bank borrowing
program (see Note 5 of Notes to Financial Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $315,011,018. Net unrealized appreciation aggregated
$26,759,392, of which $37,571,590 related to appreciated investment
securities and $10,812,198 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.2%
Basic Industries 8.4
Conglomerates 0.4
Construction & Real Estate 4.6
Durables 12.0
Energy 5.4
Finance 17.9
Health 3.7
Industrial Machinery & Equipment 6.2
Media & Leisure 2.7
Nondurables 7.2
Repurchase Agreements 7.0
Retail & Wholesale 4.8
Services 1.2
Technology 9.2
Transportation 2.0
Utilities 6.1
100.0%
DIVERSIFIED INTERNATIONAL
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S>
<C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements
of $24,069,000) (cost $315,001,806)$ 341,770,410
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value
(cost $17,280,086) (Note 2)
Short foreign currency contracts
$ (43,927,314
(Note 2))
Contracts held, at value
Receivable for contracts held
42,384,799 (1,542,515)
Cash
525
Receivable for investments sold
2,494,040
Receivable for fund shares sold
2,779,003
Dividends receivable
992,722
Interest receivable
20,671
Other receivables
14,259
TOTAL ASSETS
363,966,205
LIABILITIES
Payable for foreign currency contracts held (Note 2)
17,280,086
Payable for investments purchased
11,476,381
Payable for fund shares redeemed
1,057,187
Accrued management fee
188,610
Other payables and accrued expenses
220,826
TOTAL LIABILITIES
30,223,090
NET ASSETS
$ 333,743,115
Net Assets consist of (Note 1):
Paid in capital
$ 297,582,542
Undistributed net investment income
100,732
Accumulated undistributed net realized gain (loss) on investments
10,676,748
Net unrealized appreciation (depreciation) on:
Investment securities
26,768,604
Foreign currency contracts
(1,385,511)
NET ASSETS, for 27,683,717 shares outstanding
$ 333,743,115
NET ASSET VALUE, offering price and redemption price per share
($333,743,115 (divided by) 27,683,717 shares) (Note 4)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 2,318,427
Dividends
Interest 589,910
2,908,337
Less foreign taxes withheld (Note 1) (383,419
)
TOTAL INCOME 2,524,918
EXPENSES
Management fee (Note 4) $ 1,096,161
Basic fee
Performance adjustment (39,158
)
Transfer agent fees (Note 4) 558,328
Accounting fees and expenses 86,359
(Note 4)
Non-interested trustees' compensation 835
Custodian fees and expenses 126,385
Registration fees 59,597
Audit 14,062
Legal 1,857
Interest (Note 5) 1,113
Miscellaneous 1,135
TOTAL EXPENSES 1,906,674
NET INVESTMENT INCOME 618,244
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 10,988,477
Foreign currency contracts (384,348 10,604,129
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 6,387,312
Foreign currency contracts (1,385,511 5,001,801
)
NET GAIN (LOSS) 15,605,930
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 16,224,174
OTHER INFORMATION $86,301
Accounting fees paid to FSC
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S>
<C> <C>
INCREASE (DECREASE) IN NET ASSETS
SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations
$ 618,244 $ 998,691
Net investment income
Net realized gain (loss) on investments
10,604,129 2,534,162
Change in net unrealized appreciation (depreciation) on investments
5,001,801 24,127,201
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
16,224,174 27,660,054
Distributions to shareholders
(212,611 (425,331
From net investment income
) )
From net realized gain
(2,126,206 -
)
TOTAL DISTRIBUTIONS
(2,338,817 (425,331
) )
Share transactions
289,940,150 368,965,606
Net proceeds from sales of shares
Reinvestment of distributions
2,282,423 411,649
Cost of shares redeemed
(227,393,669 (178,021,677
) )
Net increase (decrease) in net assets resulting from share transactions
64,828,904 191,355,578
TOTAL INCREASE (DECREASE) IN NET ASSETS
78,714,261 218,590,301
NET ASSETS
Beginning of period
255,028,854 36,438,553
End of period (including undistributed net investment income of
$100,732 and $893,244, respectively) $ 333,743,115 $ 255,028,854
OTHER INFORMATION
Shares
Sold
24,297,825 35,207,206
Issued in reinvestment of distributions
201,262 48,543
Redeemed(19,352,953 (17,022,973
) )
Net increase (decrease)
5,146,134 18,232,776
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C> <C> <C>
SIX MONTHS YEAR ENDED DECEMBER 27, 1991
ENDED APRIL 30, OCTOBER 31, (COMMENCEMENT
1994 1993 OF OPERATIONS) TO
(UNAUDITED) OCTOBER 31, 1992
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 11.32 $ 8.46 $ 10.00
Income from Investment Operations
Net investment income
.03 .07 .07
Net realized and unrealized gain (loss) on investments
.82 2.89 (1.61)
Total from investment operations
.85 2.96 (1.54)
Less Distributions
From net investment income
(.01) (.10) -
From net realized gain
(.10) - -
Total distributions
(.11) (.10) -
Net asset value, end of period
$ 12.06 $ 11.32 $ 8.46
TOTAL RETURN (dagger)(diamond)
7.57% 35.38% (15.40)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 333,743 $ 255,029 $ 36,439
Ratio of expenses to average net assets
1.36%* 1.47% 2.00%*
Ratio of expenses to average net assets before expense reductions
1.36%* 1.47% 2.34%*
Ratio of net investment income to average net assets
.44%* .84% 1.38%*
Portfolio turnover rate
99%* 56% 56%*
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT
ANNUALIZED.
(diamond)THE TOTAL RETURNS WOULD HAVE BEEN
LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
</TABLE>
INTERNATIONAL GROWTH & INCOME
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). International
Growth & Income had a 2% sales charge, which was waived through May 31,
1994. The sales charge was eliminated effective June 1, 1994.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTHS YEAR YEARS FUND
INTERNATIONAL GROWTH &
INCOME 1.63% 13.91% 53.91% 94.84%
INTERNATIONAL GROWTH &
INCOME (INCL. 2% SALES
CHARGE) -0.40% 11.63% 50.83% 90.95%
Morgan Stanley EAFE
Index 5.57% 16.64% 17.76% 91.02%
JP Morgan Global Bond
Index -0.43% 4.35% 61.25% 91.97%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 31, 1986. You can compare the fund's
figures to the performance of the Morgan Stanley EAFE index - a broad
measure of the performance of stocks in Europe, Australia, and the Far
East. You can also compare the fund's performance to the JP Morgan Global
Traded Government Bond Index - a broad measure of bond performance in
developed countries, including the United States. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
INTERNATIONAL GROWTH &
INCOME 13.91% 9.01% 9.52%
INTERNATIONAL GROWTH &
INCOME (INCL. 2% SALES
CHARGE) 11.63% 8.57% 9.22%
Morgan Stanley EAFE Index 16.64% 3.32% 9.22%
JP Morgan Global Bond
Index 4.35% 10.03% 9.30%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Int'l Growth & Income (305) MS EAFE JP MORGAN GLOBAL
BOND
12/31/86 9800.00 10000.00 10000.00
01/31/87 10456.60 11091.44 10257.00
02/28/87 10917.20 11423.38 10377.01
03/31/87 11387.60 12359.45 10565.87
04/30/87 11828.60 13667.22 10575.38
05/31/87 11907.00 13667.17 10475.97
06/30/87 12024.45 13231.74 10430.92
07/31/87 12525.06 13208.62 10305.75
08/31/87 12868.62 14199.03 10418.08
09/30/87 12976.78 13975.49 10164.92
10/31/87 10259.33 11956.28 10730.09
11/30/87 9993.50 12135.62 11008.00
12/31/87 10616.00 12495.97 11382.28
01/31/88 10240.74 12719.07 11440.33
02/29/88 10704.88 13566.88 11545.58
03/31/88 11169.02 14401.06 11636.79
04/30/88 11465.28 14610.33 11582.09
05/31/88 11317.15 14141.98 11457.01
06/30/88 11188.77 13769.22 11355.04
07/31/88 11188.77 14201.21 11266.47
08/31/88 10635.75 13277.87 11186.48
09/30/88 11020.89 13858.05 11465.02
10/31/88 11662.79 15043.77 11916.74
11/30/88 11870.17 15939.87 12021.61
12/31/88 11843.61 16028.75 11949.48
01/31/89 12064.61 16310.76 11831.18
02/28/89 12104.79 16394.60 11812.25
03/31/89 12104.79 16072.84 11711.85
04/30/89 12406.16 16221.91 11905.09
05/31/89 12054.56 15339.38 11776.52
06/30/89 12094.75 15081.17 12043.84
07/31/89 13239.93 16974.95 12523.19
08/31/89 13059.11 16211.52 12152.50
09/30/89 13581.48 16949.99 12344.51
10/31/89 12928.52 16268.98 12503.76
11/30/89 13410.70 17086.82 12615.04
12/31/89 14108.24 17717.27 12762.64
01/31/90 13864.30 17058.04 12572.47
02/28/90 13376.40 15867.48 12436.69
03/31/90 13366.24 14214.47 12360.83
04/30/90 13335.75 14101.66 12312.62
05/31/90 14199.72 15710.68 12706.62
06/30/90 14646.96 15572.31 12936.61
07/31/90 15327.98 15791.65 13316.95
08/31/90 14016.76 14258.15 13213.08
09/30/90 12664.89 12271.07 13337.28
10/31/90 13935.45 14183.13 13864.10
11/30/90 13620.35 13346.50 14108.11
12/31/90 13652.87 13562.71 14264.71
01/31/91 14135.97 14001.39 14588.52
02/28/91 14934.14 15502.33 14603.11
03/31/91 14398.53 14571.68 14147.49
04/30/91 14619.08 14714.78 14318.68
05/31/91 14598.07 14868.32 14331.56
06/30/91 13894.42 13775.78 14139.52
07/31/91 14377.53 14452.61 14437.86
08/31/91 14325.01 14159.11 14738.17
09/30/91 14787.11 14957.10 15276.12
10/31/91 14692.59 15169.13 15427.35
11/30/91 14283.01 14460.97 15678.81
12/31/91 14750.27 15207.78 16470.59
01/31/92 14729.00 14882.94 16147.77
02/29/92 14750.27 14350.25 16100.94
03/31/92 14271.71 13402.90 15952.81
04/30/92 14899.16 13466.61 16085.22
05/31/92 15569.14 14368.01 16542.04
06/30/92 15420.26 13686.50 16993.64
07/31/92 14920.43 13336.22 17367.50
08/31/92 15186.29 14172.68 17829.48
09/30/92 14931.06 13892.81 17811.65
10/31/92 14133.46 13164.07 17366.36
11/30/92 14101.56 13287.94 17058.97
12/31/92 14257.48 13356.67 17221.03
01/31/93 14388.19 13355.03 17513.79
02/28/93 14780.29 13758.44 17795.76
03/31/93 15880.38 14957.71 18069.82
04/30/93 16762.62 16377.23 18398.69
05/31/93 17154.73 16723.11 18516.44
06/30/93 16926.00 16462.20 18531.25
07/31/93 17492.38 17038.46 18538.66
08/31/93 18407.29 17958.25 19087.41
09/30/93 18287.48 17554.02 19289.73
10/31/93 18788.51 18094.99 19280.09
11/30/93 18145.89 16513.30 19139.34
12/31/93 19259.02 17705.68 19334.57
01/31/94 20267.46 19202.61 19516.31
02/28/94 19905.74 19149.42 19301.63
03/31/94 18842.49 18324.63 19212.84
04/30/94 19094.60 19102.13 19197.47
Let's say you invested $10,000 in Fidelity International Growth &
Income Fund on its start date and paid the 2% sales charge. By April 30,
1994, it would have grown to $19,095 - a 90.95% increase on your initial
investment. That compares to $10,000 invested in the Morgan Stanley EAFE
index, which would have grown to $19,102 over the same period - an 91.02%
increase. If you had put $10,000 in the J.P. Morgan Global Bond index, it
would have grown to $19,197 - a 91.97% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
INTERNATIONAL GROWTH & INCOME
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Mace,
Portfolio Manager of Fidelity International Growth &
Income Fund
Q. RICK, HOW DID THE FUND DO?
A. The fund had a total return of 1.63% for the six months ended April 30,
1994. Because no index tracks the performance of both international stocks
and bonds (the fund must keep at least 25% in fixed-income investments),
the best available way to evaluate performance is to look at two indices.
During the same six-month period, the EAFE index - a broad measure of the
performance of stocks (only) in Europe, Australia and the Far East - was up
5.57%. The total return of the JP Morgan Global Traded Government Bond
Index was -0.43%. For the 12 months ended April 30, the fund returned
13.91%, the EAFE index rose 16.64%, and the global bond index was up 4.35%.
Because the fund invests in both stocks and bonds, its performance most
often should fall between those of the two indices. Comparing the fund's
returns to those of its peers is even more difficult. Lipper Analytical
Services - which tracks mutual fund performance - doesn't have a category
that compares the returns of funds that share the same investing objectives
as International Growth & Income.
Q. FROM THOSE NUMBERS, IT APPEARS AS IF FOREIGN BONDS HAVE UNDERPERFORMED
FOREIGN STOCKS OVER THE PAST SIX MONTHS . . .
A. That's true. Shortly after I took over the fund in January, I increased
the fund's bond investments in a variety of markets - including Argentina,
France and Italy - for two reasons. First, one of my priorities going
forward is to increase the fund's yield; I would like to boost the "income"
half of the fund's title. Second, stock valuations - prices relative to
other measures such as earnings - in many of the world markets were very
high. I felt bonds offered better value at the time. Turned out, I was a
couple of months too early. In early February, the Federal Reserve Board
raised U.S. short-term interest rates for the first time in five years.
This triggered a sharp sell-off in bond markets around the world. Even
though underlying economic conditions still appeared favorable for bond
investors in emerging markets such as Argentina, these markets were hit the
hardest.
Q. NOW THAT BOND PRICES HAVE FALLEN, ARE YOU FINDING BETTER VALUE?
A. Definitely, which is why I've continued to increase the fund's stake in
bonds. They made up 29.3% of the fund at the end of April compared to 8.7%
on October 31. Bond yields have risen so dramatically in Argentina that
"spreads," or the differences in yield between Argentine and U.S. bonds of
comparable maturities, are near historic highs. Plus, the country appears
to be politically stable, and inflation is low. Though bond prices in
France haven't fallen as far, they too offer good value. It's like going
into a store one day and finding an item that you know is worth a dollar,
on sale for 80 cents. If you go into the store the next day and that same
item is selling for 60 cents, it's an even better deal, and you might as
well buy even more.
Q. THE FUND'S INVESTMENT IN JAPAN HAS INCREASED FROM 14.9% AT THE END OF
OCTOBER TO 37.5% ON APRIL 30. WHY?
A. I began increasing the fund's stake in Japanese stocks right off the bat
in January. Japan's market fell last fall amid political and economic
turmoil. As a result, stocks there offer some of the most attractive
valuations in the world. But not just any Japanese stocks. I began
targeting some of Japan's biggest exporters: auto makers Honda, Nissan and
Toyota; and electronics and entertainment companies such as Hitachi,
Matsushita, Sony and TDK. What these companies have in common is effective
cost cutting, little or no debt, and very low stock valuations. The bet on
their future performance centers around continued cost-cutting and
movements in the value of the yen.
Q. WHICH AFFECTS THE PRICE OF JAPANESE EXPORTS . . .
A. Exactly. In 1993 and so far this year, a strengthening yen has made
Japan's exports more expensive - therefore less attractive - in other
countries. That, in turn, made Japanese companies less competitive. But the
yen has been especially strong, which means it should soon begin moving
back toward a fairer value. And because they've effectively cut costs,
these companies should see a healthy boost in earnings when the yen begins
to weaken. The prices of some of these stocks have already risen since the
beginning of the year, and I like their future prospects.
Q. WHERE ELSE DID YOU FIND OPPORTUNITIES ON THE STOCK SIDE?
A. As some European economies have begun to recover, cyclical stocks -
those that tend to rise and fall in step with the economy - have performed
well. Chemical companies, in particular, are beginning to gain the ability
to raise prices while sustaining earnings growth. Examples include DSM and
Akzo Nobel in the Netherlands, and Bayer and Hoechst in Germany. In
addition, German tire maker Continental and auto maker BMW, as well as
Italian auto maker Fiat, have seen an improvement in business.
Q. SINCE TAKING OVER THE FUND, YOU'VE INCREASED THE AMOUNT OF THE FUND'S
INVESTMENTS THAT ARE HEDGED WITH FOREIGN CURRENCY CONTRACTS. WHY?
A. I hedged the fund's increasing investment in Japanese stocks because I
was concerned that potential gains in these stocks might, in part, be
negated by the effects of a falling yen. In addition, a substantial portion
of the hedging was tied to the fund's growing investment in foreign bonds.
Hedging is designed to reduce currency risk, or the risk that the fund's
investments will be worth less because of movements in the currency of the
country where the investment is made. For instance, if I'm buying French
bonds, I'll pay for the purchase in French francs. Then, to hedge the
investment, I'll enter into a forward currency contract that converts my
French investment into U.S. dollars. Often, the higher yields available
from these hedged investments offset the cost of the hedging (the currency
contracts). However, if the dollar moves the wrong way, that hedging cost
can decrease the fund's short-term returns.
Q. IS THAT WHAT HAPPENED RECENTLY?
A. Yes. I expected the dollar to strengthen as U.S. interest rates went up.
But as rates went up, the rest of the world pushed up rates too, which
weakened the dollar in foreign markets. However, I still had roughly 40% of
the fund's foreign investments hedged at the end of April. I believe
changing dynamics between the dollar and other world currencies should make
hedging more worthwhile in the months ahead.
Q. SPEAKING OF THE FUTURE, WHAT'S YOUR VIEW OF THE NEXT SIX MONTHS?
A. I remain very positive on the fund's bond investments and on its sizable
stake in Japan. Even though many of the fund's Japanese stocks have risen
already, I believe their best days lie ahead. I'm not too optimistic about
other world stock markets in general, because they're still expensive. Yet
I'm very optimistic about the stocks that the fund owns within these
markets. That said, within a six-month period, plenty of unknowns can alter
the best laid plan. But I believe the fund is well positioned for long-term
growth, and hopefully an increase in income.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing in stocks and bonds,
mainly in Europe, the Far East and Pacific
Basin
START DATE: December 31, 1986
SIZE: as of April 30, 1994, more than $1.4 billion
MANAGER: Richard Mace, since January 1994;
co-manager, Fidelity Global Balanced Fund,
February 1993-December 1993; Fidelity
Select Chemicals and Industrial Materials
Portfolios, January 1992-August 1992;
Fidelity Select Transportation Portfolio, June
1989-December 1991; joined Fidelity in 1987
(checkmark)
RICK MACE ON THE FUND'S SHIFTING STRATEGY:
"One of my keys to stock selection is valuation -- a
stock's price relative to other measures such as
earnings. Shortly after taking over the fund in
January, I sold nearly all of its investment in
emerging markets such as Hong Kong, Malaysia
and Singapore. Why? Because stock valuations
were extremely high by historic standards and
relative to other companies with similar prospects
elsewhere in the world. Many of the companies in
these markets are among the fastest growing in the
world. In 1993, however, stock prices in emerging
markets rose much faster than company earnings.
And in fact, most of these markets suffered steep
corrections early in 1994. I'll continue to keep my
eye on these markets, and if valuations become
attractive again, I'll be tempted to move back in.
"By the end of 1993, Japanese stock prices, on the
other hand, had fallen by more than 50% since 1990.
In January 1994, the Japanese market appeared to
be one of the most attractively valued in the world. In
particular, the stocks of many of the larger
brand-name exporters were trading at their lowest
level of valuation in 10 years. I still feel that a
weakening yen would bode very well for the
earnings of these exporters; many have effectively
cut costs and restructured their operations. So
valuation played a major role in my decision to
reduce the fund's investments in emerging markets,
and increase its stake in Japan from about 15% six
months ago to roughly 38% on April 30."
(bullet) In addition to major exporters, the fund's stake in
Japan includes three of the countries largest
brokerage companies: Daiwa, Nikko and Nomura.
Trading volumes on Japan's stock exchanges are
down nearly 80% from their peak levels several
years ago. These brokerage firms offer attractive
stock valuations, coupled with the potential for
earnings growth should trading volume rise in
Japan.
(bullet) The fund invests in several types of derivative
instruments. In a broad sense, derivatives are
financial arrangements whose prices are derived from
other securities, currencies or indices. The fund has
the flexibility to use derivatives when they can add
value. For example, the fund has used forward
currency contracts and, to a lesser extent, currency
options to hedge against currency volatility, and has
used futures on the Nikkei Average to gain exposure
to the Japanese stock market. The fund also has an
investment in indexed securities, or structured
notes, linked mainly to foreign interest rates or
foreign stock markets. These indexed securities are
like customized bonds, and allow the manager to
design investments that target the specific
combination of market and currency exposure he
believes the fund needs.
INTERNATIONAL GROWTH & INCOME
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
Argentina 6.7%
Row: 1, Col: 1, Value: 21.1
Row: 1, Col: 2, Value: 2.3
Row: 1, Col: 3, Value: 14.5
Row: 1, Col: 4, Value: 3.9
Row: 1, Col: 5, Value: 27.1
Row: 1, Col: 6, Value: 5.2
Row: 1, Col: 7, Value: 5.5
Row: 1, Col: 8, Value: 5.3
Row: 1, Col: 9, Value: 3.1
Row: 1, Col: 10, Value: 5.3
Row: 1, Col: 11, Value: 6.7
Canada 5.3%
United States 10.7%
Denmark 3.1%
France 5.3%
Sweden 2.3%
Germany 5.5%
Italy 5.2%
Other 14.5%
Netherlands 3.9%
Japan 37.5%
AS OF OCTOBER 31, 1993
Denmark 2.3%
Row: 1, Col: 1, Value: 22.0
Row: 1, Col: 2, Value: 7.5
Row: 1, Col: 3, Value: 7.4
Row: 1, Col: 4, Value: 3.5
Row: 1, Col: 5, Value: 4.9
Row: 1, Col: 6, Value: 14.8
Row: 1, Col: 7, Value: 4.9
Row: 1, Col: 8, Value: 14.9
Row: 1, Col: 9, Value: 2.9
Row: 1, Col: 10, Value: 7.4
Row: 1, Col: 11, Value: 7.5
Row: 1, Col: 12, Value: 2.3
France 7.5%
United States 22.0%
Germany 7.4%
Italy 2.9%
United
Kingdom
7.5%
Japan 14.9%
Switzerland 7.4%
Sweden 3.5%
Netherlands 4.9%
Spain 4.9%
Other 14.8%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and equity futures 60.5 69.5
Bonds 29.3 8.7
Short-term and other investments 10.2 21.8
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Suzuki Motor Corp.
(Japan, Autos, Tires, & Accessories) 1.7 0.3
Hitachi Ltd.
(Japan, Electronics) 1.2 0.4
Veba Vereinigte Elektrizetaets & Bergwerks AG Ord.
(Germany, Electric Utilities)
1.2 1.0
Honda Motor Co. Ltd.
(Japan, Autos, Tires, & Accessories) 1.2 -
Daiwa Securities
(Japan, Securities Industry) 1.1 -
Matsushita Electric Industrial Co. Ltd. (Japan, Consumer Electronics)
1.1 -
Schlumberger Ltd.
(Netherlands, Energy Services) 1.1 -
Nomura Securities Co. Ltd.
(Japan, Securities Industry) 1.0 0.4
British Petroleum PLC Ord.
(United Kingdom, Oil & Gas) 1.0 0.5
Toyota Motor Corp.
(Japan, Autos, Tires, & Accessories) 1.0 0.4
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Durables 14.9 2.3
Finance 10.2 32.7
Technology 8.4 3.0
Basic Industries 6.6 3.6
Energy 4.1 2.5
Utilities 3.7 7.8
Industrial Machinery & Equipment 2.7 2.3
Retail & Wholesale 2.6 5.1
Construction & Real Estate 1.9 5.4
Nondurables 1.2 1.3
INTERNATIONAL GROWTH & INCOME
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 49.4%
SHARES VALUE (NOTE 1)
AUSTRALIA - 0.3%
Goodman Fielder Ltd. Ord. 4,500,000 $ 4,892,670 38238210
AUSTRIA - 0.2%
Mayr Melnhof Karton AG (d) 50,000 3,193,458 57847192
BELGIUM - 0.2%
Tessenderlo Chemie NV 8,900 2,648,615 88161299
BERMUDA - 0.4%
ACE Ltd. 200,000 5,700,000 00499G92
CANADA - 2.6%
Alcan Aluminum Ltd. 491,000 10,297,969 01371610
American Barrick Resources Corp. 53,000 1,221,794 02451E10
Canadian Pacific Ltd. Ord. 244,700 3,937,639 13644030
Cominco Fertilizer Ltd. 139,000 2,613,727 20043C10
Inco Ltd. 20,000 484,559 45325840
Methanex Corp. 450,400 4,845,376 59151K10
Midland Walwyn, Inc. (b) 500,000 3,977,725 59780110
Noranda, Inc. 154,000 2,686,953 65542210
QUNO Corp. 47,200 810,733 74726H10
Sherritt Gordon Mines Ltd. (b) 792,200 6,732,013 82428010
37,608,488
CHINA (PEOPLES REPUBLIC) - 0.1%
Yizheng Chemical Fibre Co.
Class H (d) 2,598,000 807,173 99599E22
DENMARK - 0.7%
Den Danske Bank Group AS (b) 49,900 2,764,415 24820692
FLS Industries (Smidth) Class B 24,800 2,066,587 35599092
Unidanmark AS Class A 150,000 5,300,721 92399792
10,131,723
FINLAND - 0.6%
Kone Corp. Class B Ord. 11,000 1,277,339 50400092
Outokumpu OY Class A 215,800 3,472,815 69099992
Repola OY 178,700 3,176,030 75999A92
7,926,184
FRANCE - 0.6%
Alcatel Alsthom CGE 38,000 4,600,566 01390492
Unibail (b) 18,550 1,672,057 90499592
UFB Locabail SA 33,400 2,526,546 90599B92
8,799,169
HONG KONG - 0.2%
Sun Hung Kai & Co. Ltd. 3,678,000 1,999,765 86690810
Sun Hung Kai Properties Ltd. 187,000 1,125,675 86676H10
3,125,440
GERMANY - 5.5%
Bayer AG 32,600 7,761,717 07273010
Bayerische Motor Werke (BMW) (b) 22,500 12,256,650 05528310
Continental Gummi-Werke AG (b) 65,600 11,493,882 21199010
Deutsche Bank AG 26,000 12,280,048 25152592
Douglas Holdings AG 15,500 5,585,248 25950099
Hoechst AG Ord. 22,500 4,958,434 43439010
Karstadt AG 5,000 1,901,451 48576499
Kaufhof AG 17,700 5,832,225 48615210
Veba Vereinigte Elektrizetaets &
Bergwerks AG Ord. 55,400 17,212,854 92239110
79,282,509
INDIA - 0.0%
ITC Ltd. GDS (1 share &
1/3 warrant) (b)(d) 39,000 721,500 45031810
IRELAND - 0.1%
Smurfit (Jeff) Group PLC 241,300 1,171,753 84699793
SHARES VALUE (NOTE 1)
ITALY - 0.9%
Fiat Spa 1,515,000 $ 6,592,250 31562110
SIP Spa 2,310,000 6,912,259 78401792
13,504,509
JAPAN - 22.9%
Aiwa Co. Ltd. 169,000 4,327,786 00959999
Aoyama Trading Co. Ord. 119,000 5,508,717 03799092
Bridgestone Corp. 311,000 4,655,965 10844110
Canon, Inc. 706,000 11,473,453 13780199
Casio Computer Co. Ltd.:
Ord. 832,000 10,325,228 14761893
(warrants) (b) 800 380,000 14761896
Daiwa Securities 1,009,000 15,801,344 23499010
Fujitsu Ltd. (b) 926,000 9,302,865 35959010
Hitachi Ltd. 1,848,000 17,473,450 43357810
Hitachi Ltd. ADR 77,000 7,305,375 43357850
Hitachi Maxell Ltd. 575,000 11,609,871 43358990
Honda Motor Co. Ltd. 1,000,000 16,546,830 43812810
Honda Motor Co. Ltd. ADR 130,000 4,290,000 43812830
Kamei Corp. 205,000 2,645,031 48399792
Kaneshita Construction Co. Ltd.
Ord. (b) 137,000 2,374,865 49099592
Kenwood Corp. 263,000 2,276,933 49178692
Kokusai Securities 382,000 7,374,372 50299092
Komori Corp. 154,000 4,156,013 50046299
Kyocera Corporation 30,000 1,891,067 50155610
Marui Co. Ltd. 392,000 6,486,357 60444310
Matsushita Electric Industrial Co. Ltd. 946,000 15,560,130 57687910
Matsushita Electric Works Ltd. 530,000 6,003,151 57688110
Matsuzakaya Co. Ltd. 8,800 125,677 57699492
Nikko Securities 496,000 5,960,010 65399010
Nishimatsu Construction 185,000 2,113,662 65299C22
Nissan Motor Co. Ltd. Ord. 1,138,000 9,639,315 65474491
Nisshinbo Industries 385,000 4,057,423 65411310
Nitto Denko Corp. 370,000 5,357,038 65480230
Nomura Securities Co. Ltd. 662,000 14,409,734 65536130
Sekisui Chemical 774,000 7,928,299 81699210
Shinetsu Chemical 105,000 2,161,430 82499210
Sony Corp. 240,500 13,644,046 83569999
Sony Corp. ADR 36,100 2,017,088 83569930
Suzuki Motor Corp. 1,813,000 24,106,663 86958592
TDK Corp. 277,000 12,495,420 87235110
Taiyo Yuden Co. Ltd. 407,000 4,449,621 87404799
Tokyo Style Co. Ltd. 231,000 4,209,102 88999410
Toshiba Corp. 861,000 6,529,798 89149310
Toyobo Co. 1,575,000 6,996,213 90899392
Toyota Motor Corp. 716,000 14,033,686 89399999
Toyota Motor Corp. ADR 175,000 6,803,125 89233130
Uny Co. Ltd. 351,000 5,047,376 91529010
Yurtec Corp. (b) 154,000 3,837,486 97299492
Zexel Corp. 643,000 3,964,526 99099392
327,655,541
KOREA (SOUTH) - 0.2%
Asia Motors Co., Inc. 61,200 992,596 04499B22
Korea Electric Power Corp. 35,000 1,213,321 50099B92
2,205,917
MALAYSIA - 0.0%
Tenega Nasional BHD 3,000 16,693 92099992
MEXICO - 0.6%
Grupo Financiero Bancomer SA de
CV sponsored ADR, Series C (d) 182,000 4,481,750 40048610
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 75,000 4,415,625 87940378
8,897,375
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NETHERLANDS - 3.9%
Akzo Nobel NV Ord. 83,300 $ 10,037,280 01019910
DSM NV 119,400 8,901,136 23332H92
International Nederlanden Groep CVA 90,000 3,761,917 46099892
KBB NV Ord. 71,600 4,099,694 48130092
KLM Royal Dutch Airlines Ord. (b) 110,000 3,169,944 48251620
Pirelli Tyre Holdings NV Ord. (b) 938,900 9,356,129 72499092
Schlumberger Ltd. 279,200 15,356,000 80685710
Twentsche Kabel Holding NV 15,000 1,656,343 91030099
56,338,443
NEW ZEALAND - 0.4%
Brierley Investments Ltd. 7,147,211 5,406,079 10901410
NORWAY - 1.9%
Bergesen Group Class B 50,000 1,109,390 08399011
Norsk Hydro AS:
ADR (b) 47,300 1,602,288 65653160
Ord. 249,600 8,463,851 65653150
Olav Thon Eiendomsselskp Ord. 106,700 1,548,514 67941099
Orkla AS Class A Free shares 330,400 10,834,903 39299193
Saga Petroleum AS B Free shares 278,000 3,064,708 84099794
26,623,654
SINGAPORE - 0.0%
Kim Eng Holdings Ltd. 310,000 550,259 49499D92
SOUTH AFRICA - 0.7%
Anglo American Corp. of South
Africa Ltd.:
ADR 3,200 157,600 03486130
(Reg.) (b) 30,700 1,559,892 03486110
Buffelsfontein Gold Mining Co. Ltd.:
ADR 76,300 758,231 11987120
Ord. 11,500 106,919 11987110
De Beers Consolidated Mines Ltd. ADR 25,600 608,000 24025330
Driefontein Consolidated Ltd.:
ADR 42,500 488,750 26202640
Ord. 75,500 889,675 26202630
Free State Consolidated Gold Mines Ltd.:
ADR 148,382 1,984,609 35614220
Ord. 25,578 352,562 35614210
Vaal Reefs Exploration & Mining Co.
Ltd.:
ADR 60,000 521,250 91850640
(Reg.) (b) 9,400 845,492 91850610
Western Deep Levels Ltd.:
ADR 18,300 683,963 95807720
Ord. 14,700 572,108 95807710
9,529,051
SPAIN - 1.5%
Argentaria Corp. Bancaria de Esp 264,000 11,471,867 21991392
FEC SA (Fuerzas Electricas Cataluna)
Class E 750,000 5,565,457 35899E22
Union Electrica Fenosa 800,000 4,005,200 90659510
21,042,524
SWEDEN - 2.3%
Aktiebolaget Electrolux 247,000 13,165,379 01019810
Avest Sheffield AB Ord. Free shares (b) 835,000 5,481,090 05399892
Frontline (b) 760,000 2,045,396 35999F22
SKF AB Ord. (b) 387,200 7,980,781 78437530
Scribona AB B Free shares (b) 68,500 449,646 81199B92
Skandinaviska Enskilda Banken Class A
Free shares (b) 300,000 2,067,717 88099222
Trelleborg AB Class B Free shares (b) 100,000 1,378,477 89491010
32,568,486
SHARES VALUE (NOTE 1)
SWITZERLAND - 0.1%
Globus Magazine Part. Cert. 3,175 $ 2,115,686 37957792
UNITED KINGDOM - 1.4%
British Petroleum PLC:
ADR 76,500 5,355,000 11088940
Ord. 2,404,500 14,084,479 11088910
19,439,479
UNITED STATES OF AMERICA - 1.1%
Amerada Hess Corp. 118,700 5,964,675 02355110
American Cyanamid Co. 120,700 5,672,900 02532110
American President Companies Ltd. 43,100 878,163 02910310
Imo Industries, Inc. 19,200 201,600 45254010
Kerr-McGee Corp. 61,000 2,729,750 49238610
15,447,088
TOTAL COMMON STOCKS
(Cost $657,726,276) 707,349,466
PREFERRED STOCKS - 0.7%
CONVERTIBLE PREFERRED STOCKS - 0.1%
AUSTRALIA - 0.0%
TNT Ltd. 8% 309,600 504,920 93599293
UNITED STATES OF AMERICA - 0.1%
Unocal Corp. $3.50 (d) 28,800 1,548,000 91528920
TOTAL CONVERTIBLE PREFERRED STOCKS 2,052,920
NONCONVERTIBLE PREFERRED STOCKS - 0.6%
AUSTRIA - 0.0%
Maculan Holding Ord. 9,000 866,882 55699594
ITALY - 0.5%
Fiat Spa D Risp Ord. 2,609,600 6,944,772 31599C95
KOREA (SOUTH) - 0.1%
Daewoo Heavy Industries Ltd. 74,827 935,685 23999494
TOTAL NONCONVERTIBLE PREFERRED STOCKS 8,747,339
TOTAL PREFERRED STOCKS
(Cost $9,095,382) 10,800,259
CORPORATE BONDS - 5.7%
MOODY'S RATINGS PRINCIPAL
AMOUNT (A)
CONVERTIBLE BONDS - 5.1%
ITALY - 0.9%
Softe SA euro 4 1/4%,
7/30/98 (c) - ITL 15,865,000 12,706,200 84499DAA
JAPAN (C) - 4.2%
Bridgestone Corp.:
3.70%, 12/31/98 - JPY 166,000 2,084,611 1084419A
3 4/5%, 12/31/99 - JPY 170,000 2,134,843 1084419C
Canon, Inc. 1.30%,
12/19/08 - JPY 1,569,000 17,617,046 1378019A
Matsushita Electric Industrial
Co. Ltd. 3.30%,
5/20/94 Aa2 JPY 1,113,000 10,962,271 5768799B
CORPORATE BONDS - CONTINUED
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
CONVERTIBLE BONDS - CONTINUED
JAPAN - CONTINUED
Matsushita Electric Works Co.
Ltd. 2.70%, 5/31/02 - JPY 1,079,000 $ 12,859,198 5768819A
Nippondenso Co. Ltd. 1 3/5%,
12/20/02 - JPY 813,000 9,769,171 6546379D
Nishimatsu Construction
3.90%, 3/31/99 - JPY 264,000 3,081,250 65299CAA
Shin-Etsu Chemical Co. Ltd.
1.30%, 3/31/99 A2 JPY 181,000 2,089,355 824992AA
60,597,745
TOTAL CONVERTIBLE BONDS 73,303,945
NONCONVERTIBLE BONDS - 0.6%
CZECH REPUBLIC - 0.0%
Komercni Banka 0%,
5/3/98 (e)(g) - CSK 30,000,000 998,637 50499CAB
MEXICO - 0.6%
Bancomext:
euro:
8%, 4/14/00 Ba2 $ 1,000,000 907,500 0596129A
8%, 8/5/03 Ba2 1,500,000 1,276,875 0596129C
8%, 8/5/03 (d) Ba2 1,500,000 1,276,875 059612AD
Cemex SA notes 8 7/8%,
6/10/98 (d) Ba2 3,000,000 2,932,500 151290AG
Empaques Ponderosa SA
euro 8 3/4%, 12/6/96 - 530,000 514,100 2915789B
Empresas La Moderna SA
10 1/4%, 11/12/97 (d) - 1,000,000 1,030,000 292449AA
7,937,850
TOTAL NONCONVERTIBLE BONDS 8,936,487
TOTAL CORPORATE BONDS
(Cost $80,922,246) 82,240,432
GOVERNMENT OBLIGATIONS (H) - 23.6%
ARGENTINA - 6.7%
Argentina Republic (e):
BOCON:
0%, 4/1/01 - ARP 6,451,666 3,900,737 039995AH
0%, 4/1/01 B1 47,897,433 33,509,523 039995AF
0%, 9/1/02 - ARP 2,886,328 1,432,776 039995AJ
0%, 9/1/02 - 7,382,760 4,669,153 039995AM
0%, 4/1/07 - ARP 14,347,455 6,089,518 039995AW
Brady euro 4 1/2%,
3/31/23 B1 28,000,000 14,805,000 039995AD
euro 5%, 3/31/05 - 43,500,000 31,700,625 039995AU
Province of Chaco 11 7/8%,
9/10/97 (g) - 300,000 297,750 74399JAA
96,405,082
BRAZIL - 0.7%
Brazil Federative Republic IDU
euro 4.3125%, 1/1/01 (e) - 12,870,000 9,346,837 1057569E
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
CANADA - 2.7%
Canadian Government:
6 1/2%, 6/1/04 Aaa CAD 17,000,000 $ 10,856,295 135087VD
9 1/2%, 6/1/10 Aaa CAD 17,000,000 13,416,808 135087RS
Province of Ontario 7 3/4%,
12/8/03 Aa2 CAD 20,000,000 13,483,474 6832349H
37,756,577
CZECH REPUBLIC - 0.1%
Czech Republic 14%, 7/8/96 - CSK 30,000,000 1,089,699 23299BAB
DENMARK (C) - 2.4%
Danish Government Bullet:
8%, 5/15/03 Aa1 DKK 104,300 16,959,368 249998AG
7%, 2/15/04 Aa1 DKK 116,250 17,679,009 249998AV
34,638,377
FINLAND - 0.7%
Finnish Government 9 1/2%,
3/15/04 Aa2 FIM 52,000,000 10,361,265 3178739V
FRANCE (C) - 4.7%
French Government:
OAT:
8 1/2%, 11/25/02 Aaa FRF 10,500 2,067,339 3517779U
8 1/2%, 4/25/03 Aaa FRF 50,000 9,840,050 351996AQ
8 1/2%, 4/25/23 Aaa FRF 25,000 5,001,325 351996AC
Strips 4/25/23 Aaa FRF 1,327,500 27,239,769
8 1/2%, 12/26/12 Aaa FRF 120,000 23,567,340 3517779J
67,715,823
ITALY (C) - 2.9%
Italian Government:
euro 5 1/8%, 7/29/03 A1 ITL 500,000 5,111,800 46599BAY
11%, 6/1/03 Aa3 ITL 48,980,000 33,006,983 46599BAD
10%, 8/1/03 Aa3 ITL 4,700,000 3,046,070 46599BAW
41,164,853
MEXICO - 0.4%
Mexican Government Brady
6.63%, 12/31/19 Ba2 FRF 54,750,000 5,951,090 597998VQ
NEW ZEALAND - 1.7%
Government of New Zealand
8%, 4/15/04 Aa3 NZD 40,900,000 24,804,408 6501629K
UNITED STATES OF AMERICA - 0.6%
U.S. Treasury Bills 0%,
5/5/94 Aaa $ 6,500,000 6,498,015 912794K4
U.S. Treasury Notes 9 1/4%,
1/15/96 Aaa 2,000,000 2,116,560 912827XB
8,614,575
TOTAL GOVERNMENT OBLIGATIONS
(Cost $358,671,315) 337,848,586
INDEXED SECURITIES - 2.3%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
UNITED STATES OF AMERICA - 2.3%
Bankers Trust Company:
0%, 9/16/94 (indexed to value
of 2.5-year United Kingdom
securities, multipled 8,
min. 92.43% of par) (e) $ 3,747,000 $ 3,503,070 06699DAU
4%, 9/29/94 (indexed to value
of 2.5-year United Kingdom
securities, multipled 8,
min. 92.4% of par) (e) 1,650,000 1,550,010 06699DBD
0%, 12/23/94 (coupon
inversely indexed to CAD
Banker's Acceptance rate
and principal indexed to
value of 1-year Canadian
securities, both multiplied
by 13) (f) 2,000,000 1,077,200 0669919R
4.81%, 12/29/94 (coupon
inversely indexed to
HELIBOR and principal
indexed to value of
2-year Finnish securities,
both multiplied by 8) (f) 2,000,000 1,427,600 0669919S
0%, 1/26/95 (coupon
inversely indexed to STIBOR
and principal indexed
to value of 2-year Swedish
securities, both multiplied
by 9) (f) 2,000,000 1,086,800 0669919Y
0%, 1/31/95 (coupon
inversely indexed to
STIBOR and principal
indexed to value
of 2-year Swedish
securities, both multiplied
by 9) (f) 1,200,000 683,400 06699DAC
0%, 2/22/99 (indexed to
Japanese stock index
minus S&P 500, multiplied
by 1.226%) 3,000,000 2,780,700 06699DAL
Bayerische Landesbank cert.
of dep.:
4.9525%, 12/22/94
(coupon inversely indexed
to HELIBOR and principal
indexed to value of 2-year
Finnish securities, both
multiplied by 8) (f) 5,000,000 3,635,000 072999AP
0%, 1/25/95 (inversely
indexed to 2-year SEK
LIBOR, multiplied by 9) 1,000,000 553,300 072999AR
22.31%, 3/22/95 (coupon
inversely indexed to
HELIBOR and principal
indexed to value of 3-year
Finnish securities, both
multiplied by 7) (f) 1,000,000 962,500 072999AX
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
Citibank Nassau:
4%, 9/29/94 (indexed to
value of 2.5-year British
securities, multiplied by 8,
min. 92.11% of par) (e) $ 4,650,000 $ 4,316,595 223991CP
0%, 12/23/94 (coupon
inversely indexed to
STIBOR and principal
indexed to value of 2-year
Swedish securities, both
multiplied by 9) (f) 5,000,000 3,050,500 223991BM
0%, 12/29/94 (coupon
inversely indexed to CAD
Banker's Acceptance rate
and principal indexed
to value of 1-year
Canadian securities, both
multiplied by 13) (f) 750,000 395,475 223991BP
0%, 1/18/95 (coupon
inversely indexed to
STIBOR and principal
indexed to 2-year Swedish
securities, both multiplied
by 9) (f) 1,000,000 564,700 223991BQ
ITT Corp. 3.66%, 6/27/94
(inversely indexed to 1-year
SEK swap rate, multiplied
by 10) 5,000,000 4,800,500 4506799M
Merrill Lynch & Co. Inc. Japan
Index equity participation
securities 0%, 1/31/00 2,730,000 2,648,100 590188FE
TOTAL INDEXED SECURITIES
(Cost $41,727,000) 33,035,450
CERTIFICATES OF DEPOSIT - 0.1%
MALAYSIA - 0.1%
Public Bank Malaysia 6 1/2%,
9/14/94 (Cost $741,636) MYR 2,000,000 746,414
COMMERCIAL PAPER - 1.2%
INDONESIA - 0.6%
Indonesian Bank (SBI) (c):
0%, 5/13/94 IDR 3,500,000 $ 1,616,320 06099MAF
0%, 1/6/95 IDR 6,000,000 2,573,574 06099MAD
0%, 1/13/95 IDR 9,000,000 3,852,000 06099MAE
8,041,894
MALAYSIA - 0.6%
Bank Negara Malaysia 0%,
9/7/94 MYR 25,000,000 9,137,285 06399DAP
TOTAL COMMERCIAL PAPER
(Cost $17,359,013) 17,179,179
REPURCHASE AGREEMENTS - 17.0%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 243,592,244 $243,520,000
PURCHASED OPTIONS - 0.0%
EXPIRATION
DATE/ UNDERLYING FACE
STRIKE PRICE AMOUNT AT VALUE
Put Option on JPY July 94/109.50 $ 26,962,474 $ 72,481 73499342
Put Option on JPY Aug. 94/103.71 19,407,958 283,033
TOTAL PURCHASED OPTIONS
(Cost $1,237,289) 355,514
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,411,000,157) $ 1,433,075,300
WRITTEN OPTIONS
EXPIRATION DATE/ UNDERLYING FACE UNREALIZED
STRIKE PRICE AMOUNT AT VALUE GAIN/(LOSS)
Call Option on JPY July 94/106.50 $ 26,223,776 $ (918,783)
Call Option on JPY Aug. 94/102.50 19,181,523 (95,038)
TOTAL WRITTEN OPTIONS
(Premium Received $1,186,602) $ 45,405,299 $ (1,013,821)
THE FACE VALUE OF WRITTEN CALL OPTIONS AS A PERCENTAGE OF TOTAL INVESTMENT
IN SECURITIES - 3.2%
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
1,490 Nikkei Stock Average
Contracts June 1994 $ 149,517,850 $ (3,497,850)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 10.4%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
57,984,888 ATS 5/10/94 $ 4,988,861 $ 191,051
15,081,500 CHF 5/2/94 10,748,163 134,116
436,080,216 ESP 5/3/94 15,907,790 382,616
29,798,500 FRF 5/2/94 5,265,683 62,068
4,674,834 GBP 5/16/94 to
6/29/94 7,084,232 111,253
14,046,900 NLG 5/10/94 to
6/6/94 25,863,551 585,669
40,902,500 SEK 5/5/94 5,366,536 184,544
TOTAL CONTRACTS TO BUY
(Payable amount $73,573,499) $ 75,224,816 $ 1,651,317
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 5.2%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
86,437,500 ATS 5/10/94 $ 7,436,846 $ (317,972)
911,402,478 BEF 5/4/94 to
6/30/94 26,691,766 (1,043,721)
34,189,203 CAD 5/18/94 to
6/29/94 24,654,156 109,783
30,163,000 CHF 5/2/94 to
8/2/94 21,511,130 (517,935)
62,747,600 DEM 5/11/94 to
7/18/94 37,910,257 (2,135,257)
40,175,400 DKK 7/7/94 6,176,175 (176,175)
2,142,588,492 ESP 5/3/94 15,907,791 (902,583)
483,259,930 FRF 5/2/94 to
8/8/94 85,201,080 (1,885,885)
4,674,834 GBP 5/16/94 to
6/29/94 7,084,232 (125,729)
32,855,839,375 JPY 5/31/94 to
7/25/94 324,297,021 (14,144,997)
138,720,515 NLG 5/10/94 to
6/13/94 74,640,877 (2,304,895)
40,902,500 SEK 5/5/94 5,366,536 (247,645)
TOTAL CONTRACTS TO SELL
(Receivable amount $613,184,856) $ 636,877,867 $ (23,693,011)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 44.4%
CURRENCY ABBREVIATIONS
ARP - Argentinean peso
ATS - Austrian schilling
BEF - Belgian franc
GBP - British pound
CAD - Canadian dollar
CSK - Czech koruna
DKK - Danish krone
NLG - Dutch guilder
FIM - Finnish markka
FRF - French franc
DEM - German Deutsche mark
IDR - Indonesian rupiah
ITL - Italian lira
JPY - Japanese yen
MYR - Malaysian ringgit
NZD - New Zealand dollar
SEK - Swedish krona
CHF - Swiss franc
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Principal amount in thousands
4. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $15,991,256 or 1.1% of net
assets.
5. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
6. Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
7. Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Province of Chaco 11 7/8%,
9/10/97 3/9/94 $ 308,208
Komercni Banka 0%, 5/3/98 3/3/94 $ 1,006,711
8. Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR,
the fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 14.9% AAA, AA, A 15.1%
Baa 0.0% BBB 0.0%
Ba 0.9% BB 2.8%
B 4.1% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 3.6%. FMR has determined that unrated
debt securities that are lower quality account for 0.4% of the total value
of investment in securities.
At the end of the period, restricted securities (excluding 144A issues)
amounted to $1,296,387 or 0.1% of net assets.
Purchases and sales of securities, other than short-term securities,
aggregated $1,176,229,208 and $856,869,097, respectively.
The market value of futures contracts opened and closed amounted to
$289,800,600 and $140,282,750, respectively.
The following is a summary of the fund's written options activity:
AGGREGATE
NUMBER OF FACE VALUE
CONTRACTS OF CONTRACTS
Call Option on JPY:
Outstanding at November 1, 1993 - -
Contracts opened 2 $ 46,419,120
Contracts closed - -
Outstanding at April 30, 1994 2 $ 46,419,120
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $9,815 for the period.
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $14,177,000 and $14,177,000, respectively. The
weighted average interest rate was 3 7/8%. Interest expense includes $1,526
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $1,411,041,681. Net unrealized appreciation aggregated
$22,033,619, of which $98,921,557 related to appreciated investment
securities and $76,887,938 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 6.6%
Conglomerates 0.4
Construction & Real Estate 1.9
Durables 14.9
Energy 4.1
Finance 10.2
Government Obligations 24.1
Health 0.4
Industrial Machinery & Equipment 2.7
Nondurables 1.2
Precious Metals 0.5
Repurchase Agreements 17.0
Retail & Wholesale 2.6
Services 0.5
Technology 8.4
Transportation 0.8
Utilities 3.7
100.0%
INTERNATIONAL GROWTH & INCOME
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S>
<C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements
of $243,520,000) (cost $1,411,000,157)
$ 1,433,075,300
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value (cost $73,573,499)
75,224,816
(Note 2)
Short foreign currency contracts (Note 2)
$ (636,877,867
Contracts held, at value)
Receivable for contracts held
613,184,856 (23,693,011)
Cash
255,588
Receivable for investments sold
16,987,725
Receivable for fund shares sold
4,850,441
Dividends receivable
1,900,643
Interest receivable
9,131,479
Receivable for daily variation on futures contracts
149,000
TOTAL ASSETS
1,517,881,981
LIABILITIES
Payable for foreign currency contracts held (Note 2)
73,573,499
Payable for investments purchased
34,906,042
Net payable for closed foreign currency contracts
54,654
Payable for fund shares redeemed
3,902,049
Accrued management fee
890,336
Written options, at value (premium received $1,186,602)
2,200,423
Other payables and accrued expenses
839,353
TOTAL LIABILITIES
116,366,356
NET ASSETS
$ 1,401,515,625
Net Assets consist of (Note 1):
Paid in capital
$ 1,328,901,985
Undistributed net investment income
5,829,438
Accumulated undistributed net realized gain (loss) on investments
71,262,424
Net unrealized appreciation (depreciation) on:
Investment securities
22,075,143
Foreign currency contracts
(22,041,694)
Futures contracts
(3,497,850)
Written options
(1,013,821)
NET ASSETS, for 80,470,637 shares outstanding
$ 1,401,515,625
NET ASSET VALUE offering price and redemption price per share
($1,401,515,625 (divided by) 80,470,637 shares) (Note 4)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 5,305,663
Dividends
Interest 12,468,044
17,773,707
Less foreign taxes withheld (Note 1) (771,552
)
TOTAL INCOME 17,002,155
EXPENSES
Management fee (Note 4) $ 4,730,611
Transfer agent fees (Note 4) 2,023,176
Accounting fees and expenses 261,998
(Note 4)
Non-interested trustees' compensation 3,450
Custodian fees and expenses 486,697
Registration fees 56,570
Audit 22,120
Legal 6,610
Interest (Note 5) 1,526
Miscellaneous 3,589
TOTAL EXPENSES 7,596,347
NET INVESTMENT INCOME 9,405,808
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 67,735,791
Foreign currency contracts (4,728,562
)
Futures contracts 8,479,350 71,486,579
Change in net unrealized appreciation (depreciation) on:
Investment securities (48,663,759
)
Foreign currency contracts (23,468,383
)
Futures contracts (3,497,850
)
Written options (1,013,821 (76,643,813
) )
NET GAIN (LOSS) (5,157,234
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 4,248,574
OTHER INFORMATION
Deferred sales charges withheld by $4,893
FDC (Note 4)
Accounting fees paid to FSC $258,637
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
<TABLE>
<CAPTION>
<S>
<C> <C>
Operations
$ 9,405,808 $ 2,629,481
Net investment income
Net realized gain (loss) on investments
71,486,579 1,087,001
Change in net unrealized appreciation (depreciation) on investments
(76,643,813) 73,793,319
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
4,248,574 77,509,801
Distributions to shareholders
(3,499,228) (1,389,982)
From net investment income
From net realized gain
(1,269,232) (29,697)
In excess of net realized gain
(1,646,787) -
TOTAL DISTRIBUTIONS
(6,415,247) (1,419,679)
Share transactions
825,452,361 1,037,700,151
Net proceeds from sales of shares
Reinvestment of distributions
6,281,537 1,310,736
Cost of shares redeemed
(430,898,657) (172,260,456)
Net increase (decrease) in net assets resulting from
share transactions
400,835,241 866,750,431
TOTAL INCREASE (DECREASE) IN NET ASSETS
398,668,568 942,840,553
NET ASSETS
Beginning of period
1,002,847,057 60,006,504
End of period (including undistributed net investment income of
$5,829,438 and $3,611,891, respectively)
$ 1,401,515,625 $ 1,002,847,057
OTHER INFORMATION
Shares
Sold
46,666,227 64,336,913
Issued in reinvestment of distributions
363,935 99,073
Redeemed
(24,692,694) (10,819,492)
Net increase (decrease)
22,337,468 53,616,494
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
1993 1992 1991 1990 1989
Net asset value, beginning of period
$ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87 $ 11.81
Income from Investment Operations
Net investment income
.13 .14** .31 .30(sub section) .25 .30
Net realized and unrealized gain (loss) on investments
.15# 4.14 (.84) .41 .75 .96
Total from investment operations
.28 4.28 (.53) .71 1.00 1.26
Less Distributions
From net investment income
(.06) (.31) (.16) (.38) (.16) (.13)
From net realized gain
(.02) (.01)(s diamond) (.01)(s diamond)(.05)(s diamond) - (.07)(s diamond)
In excess of net realized gain
(.03) - - - - -
Total distributions
(.11) (.32) (.17) (.43) (.16) (.20)
Net asset value, end of period
$ 17.42 $ 17.25 $ 13.29 $ 13.99 $ 13.71 $ 12.87
TOTAL RETURN (dagger)(diamond)
1.63% 32.94% (3.81)% 5.43% 7.79% 10.85%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000s omitted)
$ 1,401,516 $ 1,002,847 $ 60,007 $ 49,738 $ 35,380 $ 26,333
Ratio of expenses to average net assets
1.26%* 1.52% 1.62% 1.89% 1.98% 1.92%
Ratio of expenses to average net assets before expense
1.26%* 1.52% 1.62% 1.89% 1.98% 2.16%
reductions
Ratio of net investment income to average net assets
1.56%* .87% 2.78% 2.86% 2.31% 1.98%
Portfolio turnover rate
184%* 24% 76% 117% 102% 147%
* ANNUALIZED
(sub section) INCLUDES $.02 PER SHARE FROM RECOVERY OF FOREIGN TAXES
PREVIOUSLY WITHHELD ON DIVIDEND AND INTEREST PAYMENTS.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN
CURRENCY RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
** NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE
SHARES OUTSTANDING DURING THE PERIOD.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR
PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
# THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE
AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR THE PERIOD ENDED DUE TO
THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET
VALUES OF THE INVESTMENTS OF THE FUND.
(diamond)THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES
NOT BEEN REDUCED DURING THE PERIODS SHOWN.
</TABLE>
OVERSEAS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Overseas has a
3% sales charge, which, beginning May 31, 1994, has been waived through
June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTH YEAR YEARS FUND
S
OVERSEAS 8.27% 23.19% 47.56% 518.83%
OVERSEAS
(INCL. 3% SALES CHARGE) 5.02% 19.49% 43.13% 500.27%
Morgan Stanley EAFE
Index 5.57% 16.64% 17.76% 413.88%
Average International
Fund 6.70% 21.97% 51.95% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on December 4, 1984. You can compare the fund's
figures to the performance of the Morgan Stanley EAFE index - a broad
measure of the performance of stocks in Europe, Australia, and the Far
East. You can also compare the fund's performance to the average
international fund which reflects the performance of 170 funds with similar
objectives tracked by Lipper Analytical Services. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
OVERSEAS 23.19% 8.09% 21.37%
OVERSEAS
(INCL. 3% SALES CHARGE) 19.49% 7.44% 20.98%
Morgan Stanley EAFE Index 16.64% 3.32% 19.00%
Average International Fund 21.97% 8.50% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Overseas (094) MS EAFE
12/04/84 9700.00 10000.00
12/31/84 9981.30 10193.53
01/31/85 10689.40 10422.65
02/28/85 10640.90 10361.03
03/31/85 11067.70 11164.76
04/30/85 11504.20 11126.55
05/31/85 12464.50 11599.34
06/30/85 12697.30 11897.35
07/31/85 13473.30 12511.82
08/31/85 14055.30 12913.71
09/30/85 14559.70 13669.40
10/31/85 15442.40 14599.44
11/30/85 16548.20 15198.76
12/31/85 17833.85 15918.65
01/31/86 18371.30 16317.71
02/28/86 21078.14 18125.28
03/31/86 24703.54 20674.06
04/30/86 25465.75 22027.83
05/31/86 24654.68 21048.78
06/30/86 26579.76 22481.82
07/31/86 29579.75 23869.90
08/31/86 31543.92 26221.76
09/30/86 30078.12 25952.02
10/31/86 26296.37 24218.32
11/30/86 28758.91 25614.83
12/31/86 30183.41 26972.00
01/31/87 34828.46 29838.08
02/28/87 35945.95 30731.05
03/31/87 40010.55 33249.27
04/30/87 43001.48 36767.40
05/31/87 42837.14 36767.26
06/30/87 39824.30 35595.88
07/31/87 40415.91 35533.69
08/31/87 43779.34 38198.08
09/30/87 43242.50 37596.71
10/31/87 33853.39 32164.65
11/30/87 33579.50 32647.11
12/31/87 35727.39 33616.52
01/31/88 34338.32 34216.71
02/29/88 35428.67 36497.48
03/31/88 37579.48 38741.56
04/30/88 38565.27 39304.55
05/31/88 37788.59 38044.60
06/30/88 36713.18 37041.81
07/31/88 36235.22 38203.95
08/31/88 35144.88 35719.99
09/30/88 36459.26 37280.76
10/31/88 37788.59 40470.59
11/30/88 38774.38 42881.27
12/31/88 38677.38 43120.36
01/31/89 39151.29 43879.03
02/28/89 40175.55 44104.58
03/31/89 39823.94 43238.97
04/30/89 40680.04 43639.99
05/31/89 38723.24 41265.84
06/30/89 37591.96 40571.18
07/31/89 41322.11 45665.83
08/31/89 40359.00 43612.06
09/30/89 42514.54 45598.67
10/31/89 40206.13 43766.63
11/30/89 42483.96 45966.76
12/31/89 45226.82 47662.81
01/31/90 44200.40 45889.35
02/28/90 43286.24 42686.52
03/31/90 44713.61 38239.61
04/30/90 44601.34 37936.14
05/31/90 47632.50 42264.70
06/30/90 48482.51 41892.44
07/31/90 50872.16 42482.52
08/31/90 45242.86 38357.11
09/30/90 40223.00 33011.49
10/31/90 44056.06 38155.31
11/30/90 42596.61 35904.60
12/31/90 42240.75 36486.24
01/31/91 43177.92 37666.39
02/28/91 44745.54 41704.18
03/31/91 43280.15 39200.58
04/30/91 43893.57 39585.54
05/31/91 43978.77 39998.59
06/30/91 41218.38 37059.46
07/31/91 43467.59 38880.26
08/31/91 43791.34 38090.68
09/30/91 45716.79 40237.43
10/31/91 45870.15 40807.83
11/30/91 44217.32 38902.74
12/31/91 45879.11 40911.80
01/31/92 46405.83 40037.93
02/29/92 45443.20 38604.89
03/31/92 44498.74 36056.33
04/30/92 47204.99 36227.73
05/31/92 49239.22 38652.66
06/30/92 48076.80 36819.27
07/31/92 45025.46 35876.95
08/31/92 44644.04 38127.18
09/30/92 42791.44 37374.28
10/31/92 39885.40 35413.83
11/30/92 39685.61 35747.08
12/31/92 40623.32 35931.97
01/31/93 41807.32 35927.55
02/28/93 42664.70 37012.81
03/31/93 45563.45 40239.06
04/30/93 48727.57 44057.85
05/31/93 49850.33 44988.34
06/30/93 48666.33 44286.43
07/31/93 50891.43 45836.67
08/31/93 53769.76 48311.07
09/30/93 53300.25 47223.62
10/31/93 55443.69 48678.94
11/30/93 52912.39 44423.89
12/31/93 56894.62 47631.62
01/31/94 60939.26 51658.65
02/28/94 59798.47 51515.57
03/31/94 58076.90 49296.72
04/30/94 60026.62 51388.34
Let's say you invested $10,000 in Fidelity Overseas Fund on its start date
and paid the 3% sales charge. By April 30, 1994, it would have grown to
$60,027 - a 500.27% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley EAFE index, which would have grown
to $51,388 over the same period - a 413.88% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
OVERSEAS
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Hickling,
Portfolio Manager of Overseas
Q. JOHN, HOW DID THE FUND PERFORM?
A. Quite well. For the six months and year ended April 30, 1994, the fund
had total returns of 8.27% and 23.19%, respectively. It outperformed the
EAFE index - a broad measure of stocks in Europe, Australia and the Far
East - which returned 5.57% and 16.64% over the same periods. The fund also
beat the average international fund, which had a return of 6.70% for the
past six months and 21.97% for the past year, according to Lipper
Analytical Services.
Q. WHY DID THE FUND OUTPERFORM THE INDEX?
A. There were two primary reasons. First, when Japanese stocks began
turning in solid results in 1994, I didn't rush in and buy stocks
indiscriminately as some investors did. I chose my stocks carefully,
focusing on auto, electronics and consumer electronics companies, which all
turned in strong performances. At the end of the period, Japanese companies
made up over 20% of the fund. The second reason the fund beat the index is
that it had substantially more money invested in Italy than the index did.
Over the period, Italy was one of the top-performing markets in the world
for several reasons. First, its economy started to recover a bit, and,
along with this, many Italian companies, such as Fiat, took steps to
significantly cut costs. In addition, interest rates came down and the
country's currency was devalued. As a result of this devaluation, Italy's
exports became less expensive in other countries, and thus, more
competitive. Finally, a new group of conservative politicians with a
pro-business agenda came into power.
Q. WHAT DO YOU THINK IS BEHIND THE TURNAROUND IN JAPAN?
A. A couple of things. First, the economy, which had been depressed,
started to pick up. In addition, many Japanese companies were well placed
to profit from the improving economy because they had taken significant
steps to reduce their costs over the past few years. I should note that
Japanese companies have been able to avoid cutting costs the American way -
through factory closings and layoffs - because in Japan most workers' jobs
have built-in wage flexibility. This means an employee's pay is based
largely on overtime and bonuses, both of which tend to drop off when the
economy falls. As a result, Japanese companies can trim expenses without
reducing head count. Japan's economy also experienced a boost from tax
cuts, an increase in the government's investment spending, dropping oil
prices (an important factor because Japan imports all of its oil), and low
interest rates. Keeping all these factors in mind, I think if the yen stops
strengthening, many Japanese companies could show a substantial profit.
Q. TOYOTA IS ONE OF YOUR TOP STOCKS. IS IT A GOOD EXAMPLE OF A JAPANESE
COMPANY THAT'S BEEN CUTTING COSTS?
A. Absolutely. I was more impressed with Toyota than any other Japanese
company in terms of its cost-cutting measures. It took a number of steps
that helped it effectively reduce production costs. For example, the
company stopped making extras like rear view mirrors in a lot of colors and
styles -something that was considered to be high status in the `80s, but
that made cars more expensive to produce. Instead it started focusing on
keeping production simple and costs down, what Toyota calls "value
engineering." In fact, the company has been so successful in reducing
expenses that it projects the cost of developing its next automobile will
be about 4% of the cost of developing the Lexus, the company's luxury car
introduced in 1989.
Q. ARE JAPANESE COMPANIES TAKING OTHER STEPS TO IMPROVE PRODUCTIVITY?
A. Yes, I believe they are. A number of Japanese companies are moving their
operations overseas, to less expensive locations, such as Malaysia and the
United States. Then they're importing the goods they produce back to Japan.
This makes a lot of sense because it's more expensive to buy or make a
product in Japan than just about anywhere else in the world. Japanese
companies also are importing more goods from other countries. For instance,
car companies are asking themselves, why should we buy steel in Japan and
pay 50% more for it than Ford pays for its steel? As a case in point, Mazda
just announced it was testing steel in Korea, which many market watchers
see as an indication that the car maker plans to buy steel from Korea.
Q. LET'S SWITCH THE FOCUS TO EUROPE. ON THE WHOLE, HOW DID IT LOOK?
A. Europe's economy is several years behind the United States'. The United
States went into recession before Europe did, and while it started coming
out of recession early in 1993, Europe is just beginning to emerge. Over
the past six months, Europe turned in a good performance because many
companies there have implemented strict cost-cutting measures. Going
forward, I believe many companies could see significant increases in
productivity and profits as long as the European economic outlook doesn't
worsen.
Q. WHAT EUROPEAN INDUSTRIES LOOKED GOOD?
A. Over the past year as European economies began to improve, there was a
major shift out of banks and insurance companies and into cyclicals, such
as chemical and automobile companies. Financial stocks fell out of favor
after their stock prices rose dramatically and many investors sold them to
take profits. Cyclicals are stocks that tend to perform well when the
economy does well, or poorly when the economy is weak. Some cyclicals that
turned in good results were the Swiss chemical and pharmaceutical company
Ciba-Geigy; German chemical companies Bayer and Hoechst; and the French
auto maker Peugeot.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. The fund has the authority to use derivatives to help manage its
investments more efficiently. I currently am using forward contracts to
hedge a portion of the fund against currency volatility, and also have a
small position in indexed securities linked to European bond markets.
Q. IN HINDSIGHT, DO YOU REGRET ANY OF YOUR INVESTMENT DECISIONS?
A. Yes. I was a bit too cautious with my investments in Southeast Asia. I
sold my stocks in some Asian markets, such as Singapore and Malaysia, too
soon, probably about two months before they hit their peak. I should note,
however, that as a result, the fund was out of those markets before they
began falling dramatically in 1994. I also regret not dropping the fund's
European financial stocks, such as National Westminster Bank, earlier
because their prices dropped very quickly.
Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT GOING FORWARD?
A. In general, I expect 1994 to be a fine year. If the Japanese economy
improves, even slightly, and the yen stays where it is, many companies will
profit from their cost-cutting efforts. I have similar expectations for
Europe. Given the measures many European companies have taken to reduce
expenses and an expected moderate economic environment, I think European
companies may become increasingly profitable.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in stocks in
Europe, the Far East, and the Pacific Basin
START DATE: December 4, 1984
SIZE: as of April 30, more than $1.9 billion
MANAGER: John Hickling, since January 1993;
manager Advisor Overseas, since February
1993; VIP: Overseas, since January 1993;
Fidelity Japan Fund, since May 1993; previously
managed Fidelity Europe, International Growth
and Income, International Opportunities (now
Emerging Markets), and Pacific Basin funds.
(checkmark)
JOHN HICKLING ON PICKING STOCKS:
"I tend to be a bottom up investor. That means I
usually invest in specific companies I expect to
perform well, instead of certain countries or regions
that look good. To make sound decisions about
companies, I try to visit as many of them as I can.
And if I can't go there, a lot of companies'
representatives visit us in the United States. In
addition to me, Fidelity has about 50 analysts
traveling around the globe and meeting with
companies.
"When I visit a country, I try to meet with at least four
companies a day. At the end of the week, I come
away with a great idea of what's happening in the
country. You become totally immersed in the
companies you visit and get a great overview of the
country's economic outlook. That's because you're
talking to the guys on the front line of the economy -
the people who make the decisions about a
company's inventory, production, purchasing and
costs - not an economics professor in an ivory
tower.
"In Japan, company meetings may be even more
important because there isn't as much written
information - or formal disclosure - as you have
access to in most western companies. Much like
other Asian countries, Japan is very much what I call
a `relationship market,' and it also is a much more
formal society. You can't just walk into a company
cold and expect to get information. On the other
hand, if you've been meeting with a company for
years, Japanese business people tend to speak with
you freely. That's why it's important that Fidelity has
an established presence in Japan."
(bullet) The fund's holdings in cash and short-term
investments are up substantially from six months
ago as the fund shifted to cash as a defensive
measure.
(bullet) The fund was big on oil companies, such as
French companies Elf Aquitaine and Total, which
were inexpensive on a cash flow basis but had high
yields. Cash flow is the amount of money a company
has left over after capital expenditures and taxes.
British Petroleum in the U.K. and Petrofina in
Belgium also turned in solid performances.
OVERSEAS
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
Australia 2.0%
United States 16.4%
Row: 1, Col: 1, Value: 16.4
Row: 1, Col: 2, Value: 8.800000000000001
Row: 1, Col: 3, Value: 5.7
Row: 1, Col: 4, Value: 3.7
Row: 1, Col: 5, Value: 4.7
Row: 1, Col: 6, Value: 13.5
Row: 1, Col: 7, Value: 5.1
Row: 1, Col: 8, Value: 20.5
Row: 1, Col: 9, Value: 5.4
Row: 1, Col: 10, Value: 7.3
Row: 1, Col: 11, Value: 6.9
Row: 1, Col: 12, Value: 2.0
France 6.9%
Germany 7.3%
United
Kingdom 8.8%
Italy 5.4%
Switzerland 5.7%
Japan 20.5%
Sweden 3.7%
Spain 4.7%
Other 13.5%
Netherlands 5.1%
AS OF OCTOBER 31, 1993
United States 9.5%
Australia 3.1%
Row: 1, Col: 1, Value: 9.5
Row: 1, Col: 2, Value: 12.9
Row: 1, Col: 3, Value: 8.6
Row: 1, Col: 4, Value: 2.7
Row: 1, Col: 5, Value: 4.9
Row: 1, Col: 6, Value: 16.6
Row: 1, Col: 7, Value: 5.4
Row: 1, Col: 8, Value: 18.1
Row: 1, Col: 9, Value: 4.9
Row: 1, Col: 10, Value: 8.0
Row: 1, Col: 11, Value: 5.3
Row: 1, Col: 12, Value: 3.1
France 5.3%
United
Kingdom 12.9%
Germany 8.0%
Italy 4.9%
Switzerland 8.6%
Japan 18.1%
Sweden 2.7%
Spain 4.9%
Netherlands 5.4%
Other 16.6%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 81.6 87.6
Bonds 2.0 2.9
Short-term and other investments 16.4 9.5
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stet (Societa Finanziaria Telefonica Spa)
(Italy, Telephone Services)
1.8 1.9
Bayer AG
(Germany, Chemicals & Plastics) 1.2 1.0
Hitachi Ltd.
(Japan, Electronics) 1.2 1.1
Hoechst AG Ord.
(Germany, Chemicals & Plastics) 1.1 0.3
Ciba-Geigy AG (Reg.)
(Switzerland, Chemicals & Plastics) 1.1 0.2
Toshiba Corp.
(Japan, Electrical Equipment) 1.0 0.1
Toyota Motor Corp.
(Japan, Autos, Tires, & Accessories) 1.0 0.8
Peugeot SA Ord.
(France, Autos, Tires, & Accessories) 1.0 -
Holderbank Financiere AG PC (Bearer)
(Switzerland, Banks)
1.0 0.6
Telefonica de Espana SA Ord.
(Spain, Telephone Services) 1.0 1.0
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 17.5 38.8
Durables 12.6 5.8
Basic Industries 11.4 5.4
Utilities 7.8 10.4
Technology 7.6 5.6
Construction & Real Estate 4.4 4.9
Industrial Machinery & Equipment 3.8 3.1
Energy 3.6 2.7
Transportation 3.0 1.7
Services 2.4 2.8
OVERSEAS
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 76.8%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.1%
YPF Sociedad Anonima sponsored ADR
representing Class D shares 83,500 $ 2,066,625 98424510
AUSTRALIA - 2.0%
Ampolex Ltd. Ord. 1,631,500 5,134,853 03212792
Brambles Industries 404,000 4,167,111 10599010
FAI Insurance Ltd. Ord. 3,866,800 2,655,293 30239330
Hazelton Airlines Ltd. 721,400 1,444,849 42199522
Lend Lease Corp. Ltd. 190,000 2,321,291 52599292
Pioneer International Ltd. 966,700 1,991,460 72371110
TNT Ltd. (b) 3,141,200 4,808,360 93599292
Westpac Banking Corp. 4,924,181 16,730,791 96121410
39,254,008
AUSTRIA - 0.6%
Austrian Airlines/Oster Luftve 4,400 753,691 05299A22
Mayr Melnhof Karton AG (c) 33,000 2,107,682 57847192
OEMV AG 48,800 4,099,746 67399592
Steyr Daimler Puch AG 83,500 1,746,546 86099322
Verbund Gesellschaft 46,000 2,450,958 92299999
11,158,623
BELGIUM - 1.1%
Delhaize 137,700 5,515,025 24650010
Petrofina SA 9,200 2,879,510 71648510
Solvay 27,505 13,386,979 83425810
21,781,514
BERMUDA - 0.2%
Consolidated Electric Power Asia Ltd.
sponsored ADR (c) 67,400 968,875 20855210
Jardine Strategic Holdings Ord. 894,500 3,277,063 47199020
4,245,938
BRAZIL - 0.7%
Coteminas PN 4,900,000 1,328,390 22199692
Telebras PN (Pfd. Reg.) 344,286,800 12,413,994 95499792
13,742,384
CANADA - 0.6%
Abitibi-Price, Inc. 274,700 3,253,209 00368010
Noranda, Inc. 460,700 8,038,178 65542210
11,291,387
FINLAND - 0.8%
Amer Group Ltd. Class A 221,900 5,716,883 02351210
Huhtamaki Ord. 83,900 3,336,295 44499392
Kansallis-Osake-Pankki 322,600 728,740 48199210
Outokumpu OY Class A (b) 270,100 4,346,652 69099992
Repola OY 65,200 1,158,798 75999A92
Unitas Bank Ltd. B Free shares 109,200 291,529 90499123
15,578,897
FRANCE - 6.5%
Accor SA 63,700 8,286,179 00439991
Assurances Generales (Reg.) 32,400 3,109,438 04557510
BNP Ord. 221,520 10,390,845 05599996
Bail Investissement (b) 7,900 1,354,365 05699092
Club Mediterranee 3,700 280,937
Credit Lyonnais CI 31,900 3,117,833 22799392
Elf Aquitaine 207,400 15,197,604 28627199
Financiere Bank de Suez Cie 105,900 6,118,542 31799110
GAN (Groupe des Assur. Natl.) 89,900 6,975,274 36599792
Klepierre SA (b) 3,600 402,121 49899822
Lafarge Coppee 187,400 15,202,651 50586310
Paribas SA (Cie Financiere) Class A (b) 57,600 4,415,186 73999192
SHARES VALUE (NOTE 1)
Pechiney SA CIP 32,150 $ 2,284,252 70599310
Peugeot SA Ord. (b) 124,400 19,677,978 71682510
Plastic Omnium Cie 28,850 3,803,835 72799622
Rhone Poulenc SA Class A 292,750 8,014,667 76242695
Salomon SA 3,600 1,342,524 93099292
Skis Rossignol SA 710 253,482 83099C22
Sophia SA 12,375 1,058,590 84199C22
Total Compagnie Francaise des Petroles
Class B 175,700 10,216,561 20434510
Unibail 47,340 4,267,126 90499592
Vallourec 51,500 2,990,059 92017610
128,760,049
GERMANY - 6.6%
Allianz Versich Holdings Ord.
(Reg.) (b) 3,350 5,241,717 01882495
BASF AG 26,900 5,355,605 05526230
Bayer AG 97,700 23,261,342 07273010
Bayerische Motor Werke (BMW) (b) 19,500 10,622,430 05528310
Computer AG (b) 8,600 3,847,642 20599492
Continental Gummi-Werke AG (b) 65,000 11,388,755 21199010
Deutsche Bank AG 33,300 15,727,908 25152592
Hoechst AG Ord. 101,300 22,323,972 43439010
Kolbenschmidt AG 9,300 1,326,965 50799792
Sixt AG Ord. (b) 6,035 1,988,558 83002199
Thyssen AG Ord. 87,400 15,128,549 88629110
Veba Vereinigte Elektrizetaets &
Bergwerks AG Ord. 42,430 13,183,057 92239110
129,396,500
GHANA - 0.1%
Ashanti Goldfields GDR (c) 49,000 1,078,000
HONG KONG - 0.5%
Dairy Farm International Holdings Ltd.
Ord. 1,196,000 1,749,557 23385910
Dickson Concept 3,952,000 2,660,368 25399210
Hong Kong Land Holdings Ltd. 1,311,000 3,682,822 43858292
Jardine Matheson & Co. Ltd. Ord. 316,000 2,065,841 47111510
10,158,588
INDIA - 0.0%
ITC Ltd. GDS (warrants) (b)(c) 19,000 142,500 45031811
INDONESIA - 0.6%
Astra International (For. Reg.) 110,000 836,527 04699894
Bank International Indonesia Ord. (b) 1,556,300 4,510,422 06199B92
Jakarta International Hotels &
Development Ord. 3,017,400 4,337,482 47399693
Sampoerna, Hanjaya Mandala 400,000 3,060,468 82299892
12,744,899
IRELAND - 0.4%
Bank of Ireland U.S. Holdings, Inc. 727,000 2,989,737 06278793
Fyffes PLC 1,306,100 1,922,553 34999G22
Independent 381,750 1,911,709 45399E92
Smurfit (Jeff) Group PLC 356,100 1,729,222 84699793
8,553,221
ITALY - 2.0%
Alitalia (Linee Aeree Italy) Class A 3,333,000 3,110,789 01608910
Assicurazioni Generali Spa 478,200 13,962,474 04542910
Montedison Spa Ord. 6,337,300 6,314,422 61237610
SAI (Soc. Assicur Industriale) 355,000 5,160,255 78399110
SIP Spa 3,031,600 9,071,517 78401792
Safilo (Sta Azionaria Fab) Spa 371,800 2,203,986 78499999
39,823,443
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - 20.5%
ADO Electronic Industrial Co. 76,000 $ 2,537,575 00699992
Advantest Corp. 143,000 4,859,156 00799010
Alpine Electronics, Inc. (warrant #1) 150 367,500 02099193
Alps Electric Co. Ltd. 271,000 3,790,209 02199292
Amadasonoike Co. Ltd. 219,000 1,660,889 02499492
Aoyama Trading Co. Ord. 105,000 4,860,633 03799092
Asahi Glass (warrants) (b) 200 200,000 04339392
Autobacs Seven Co. Ltd. 34,700 4,443,022 05299392
Bridgestone Corp. 441,000 6,602,189 10844110
Canon, Inc. 984,000 15,991,328 13780199
Canon, Inc. (warrants) (b) 150 150,000 13800695
Casio Computer Co. Ltd. Ord. 224,000 2,779,869 14761893
Chudenko Corporation 43,000 1,655,964 17123410
Cosmo Oil Company Ltd. 306,000 2,519,610 22199092
Daiwa House Industry Co. Ltd. 72,000 1,085,000 23406299
Daiwa House Industry Co. Ltd.
(warrants) (b) 75 75,000 23406297
East Japan Railway Ord. (b) 1,100 5,222,102 27399722
Fujitsu Ltd. (b) 1,274,000 12,798,973 35959010
Futaba Industrial Co. Ltd. (b) 123,000 2,301,783 38299192
Hanshin Department Store 88,000 693,391 41199292
Hitachi Ltd. 2,409,000 22,777,890 43357810
Hitachi Maxell Ltd. 514,000 10,378,215 43358990
Honda Motor Co. Ltd. 622,000 10,292,128 43812810
Ishihara Sangyo Kaisha Ltd. 657,000 2,763,112 46427899
Izumi Co. Ord. 86,000 2,066,779 46399292
Japan Airlines Co. Ltd. 623,000 4,356,645 47103420
Joshin Denki Co. Ltd. Ord. 178,000 2,822,614 48199999
Kawasaki Steel Corp. 1,058,000 3,866,027 48636810
Komatsu Ltd. Ord. 693,000 6,197,617 50045899
Kyocera Corporation 26,000 1,638,925 50155610
Marubeni Corp. (b) 662,000 3,384,005 57381010
Marukyo Corp. 55,000 1,950,162 57899792
Matsushita Electric Industrial Co. Ltd. 779,000 12,813,257 57687910
Minebea Co. 924,000 6,188,518 60299392
Mitsubishi Heavy Industry 583,000 3,875,947 60699310
Mitsubishi Petro Chemical 464,000 3,107,654 60690910
Mitsubishi Trust & Banking 682,000 10,075,841 60699410
Mitsui Petrochemical Industries, Inc. (b) 385,000 3,090,464 60691110
Mitsui Trust and Banking 206,000 2,231,853 60684699
Murata Manufacturing Co. Ord. 403,000 17,464,791 62699110
NGK Spark Plug Co. (warrants) (b) 150 465,000 64499922
Nichido Fire & Marine Insurance Co. 710,000 5,860,141 65399920
Nikko Securities 269,000 3,232,344 65399010
Nippon Sheet Glass (warrants) (b) 350 153,125 65461393
Nippon Shinpan Ltd. 226,000 2,136,905 65461710
Nippon Telegraph & Telephone Ord. (b) 600 5,212,253 65462492
Nissan Motor Co. Ltd. Ord. 824,000 6,979,610 65474491
Nomura Securities Co. Ltd. 702,000 15,280,413 65536130
Oji Paper Ltd. (b) 359,000 3,429,825 67811810
Orix Corp. 441,000 16,809,513 68616710
Pioneer Electronic Corp. 134,000 3,444,696 72365710
Rohm Co. Ltd. 245,000 9,700,581 77536110
Sanwa Bank 183,000 3,965,330 80399410
Sharp Corp. 246,000 4,022,063 81989991
Sharp Corp. (warrants #1) (b) 900 522,752 81989994
Sony Corp. 278,700 15,811,208 83569999
Sumitomo Realty & Development Co. Ltd. 479,000 3,113,759 86562310
Sumitomo Rubber Industries 187,000 1,823,401 86699892
Sumitomo Trust & Banking Co. 414,000 5,708,658 86599310
Suzuki Motor Corp. 443,000 5,890,376 86958592
TDK Corp. 397,000 17,908,599 87235110
Tokio Marine & Fire Insurance Co. Ltd.
(The) 675,000 8,642,767 88909099
Tokyo Electron Ltd. 75,000 2,385,994 89499999
SHARES VALUE (NOTE 1)
Tokyo Electron Ltd. (warrant #2) (b) 500 $ 262,500 89499922
Tokyo Style Co. Ltd. 659,000 12,007,784 88999410
Toppan Printing (warrants) (b) 200 90,000 89074792
Toshiba Corp. 2,649,000 20,089,937 89149310
Toyobo Co. 713,000 3,167,175 90899392
Toyota Motor Corp. 1,007,000 19,737,321 89399999
Yamaha Motor Co. Ltd. (b) 22,000 195,016 98456092
403,985,683
KOREA (SOUTH) - 0.7%
Cho Hing Bank Co. Ltd. 79,000 821,592 17099E22
Korea Electric Power Corp. 285,000 9,879,901 50099B92
Korea First Securities Co. (b) 5,100 104,816 50099K22
Kyungki Bank Ltd. (b) 135,000 1,462,486 61999922
Seoul Securities Co. (b) 120,870 2,124,989 83599P22
14,393,784
LUXEMBOURG - 0.3%
Arbed SA 35,100 5,042,734 03899030
MALAYSIA - 0.6%
Ekran BHD Ord. (b) 313,000 2,653,335 28299792
KL Industries Holdings BHD 570,000 898,274 49799B92
Magnum Corp. BHD 960,000 2,258,573 55999392
Resorts World BHD 497,000 2,784,000 76199592
Telekom Malaysia BHD 324,000 2,419,898 94099892
Time Engineering BHD (b) 317,000 1,000,319 93099592
12,014,399
MEXICO - 1.0%
Grupo Dina (Consorcio G) ADR (b) 117,200 1,508,950 21030610
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 189,800 4,673,825 40048610
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 230,400 13,564,800 87940378
19,747,575
NETHERLANDS - 5.1%
Akzo Nobel NV Ord. 135,400 16,315,099 01019910
DSM NV 122,400 9,124,783 23332H92
Fokker Aircraft Ord. 79,500 710,854 34419010
Frans Maas Groep NV (Koninklj) 90,600 2,464,476 35399322
Hoogovens en Staalfabrieken (b) 128,800 5,009,082 43888410
International Nederlanden Groep CVA 223,000 9,321,195 46099892
KBB (Kon Bijenkorf Beheer) NV:
Ord. 56,700 3,246,544 48130092
(right) 56,700 24,433 48130095
KLM Royal Dutch Airlines Ord. (b) 145,100 4,181,444 48251620
Oce Van Der Grinten NV 288,500 12,680,637 67462710
Philips Electronics (b) 623,300 18,230,646 71833799
Pirelli Tyre Holdings NV Ord. (b) 1,788,000 17,817,402 72499092
Wereldhave NV 33,600 1,994,463 95199E22
101,121,058
NEW ZEALAND - 0.2%.
Fletcher Challenge Ltd. (Reg.) (b) 1,665,500 3,240,797 33999592
NORWAY - 1.8%
Bergesen Group:
Class A 168,800 3,745,301 08399010
Class B 347,200 7,703,604 08399011
Christiania Bank Free shares Ord. (b) 1,760,000 3,548,934 17100792
Den Norske Bank Class A
Free shares (b) 1,267,700 3,423,056 25299792
Norsk Hydro AS ADR (b) 66,200 2,242,525 65653160
Norske Skogindustrier AS:
A Free shares (b) 127,200 3,017,541 66499594
(rights) (b) 127,200 33,726 66499596
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NORWAY - CONTINUED
Olav Thon Eiendomsselskp Ord. 81,300 $ 1,179,889 67941099
Orkla AS Class B (non-vtg.) 152,400 4,827,563 39299192
Unitor AS 286,300 5,713,137 91699392
35,435,276
SINGAPORE - 0.7%
Neptune Orient Lines Ltd. (b) 9,003,000 13,143,480 64099610
Van Der Horst Ltd. 244,000 1,161,233 92099C22
14,304,713
SPAIN - 4.7%
Acerinox SA (Reg.) 35,775 3,744,251 00499192
Argentaria Corp. Bancaria de Esp 108,600 4,719,109 21991392
Banco Bilbao Vizcaya SA Ord. (Reg.) 472,900 11,293,396 05945891
Banco Intercontinental Espanol 100,750 8,980,501 24699592
Corporacion Mapfre International Reas
(Reg.) (b) 188,250 7,984,456 16899192
Empresa Nacional de Celulosa SA 92,300 1,600,896 29299N22
FOCSA (Fomento Construciones
Contrata) 43,975 4,883,389 34418599
FOCSA (Fomento Construciones
Contrata) (c) 16,000 1,776,787 34418593
Iberdrola SA 729,500 5,239,940 45499892
Repsol SA:
Ord. (b) 359,700 11,996,678 76026T10
sponsored ADR 46,600 1,537,800 76026T20
Telefonica de Espana SA Ord. 1,422,400 19,335,138 87938210
Union Electrica Fenosa 1,513,200 7,575,836 90659510
Uralita SA (b) 238,450 2,479,704 91799310
Vallehermoso SA 25,583 494,082 91899224
93,641,963
SWEDEN - 3.7%
ASG AB Class B Free Shares Ord. 84,200 1,437,030 16599C22
Aktiebolaget Electrolux 251,700 13,415,894 01019810
Frontline (b) 453,000 1,219,163 35999F22
ICB Shipping Class B (b) 108,333 1,308,456 44999B92
Investor AB B Free shares 114,700 2,815,888 46199A92
Marieberg Tidnings A Free shares (b) 84,000 2,216,592 56799392
SKF AB Ord. (b) 660,600 13,615,970 78437530
Scribona AB B Free shares 17,900 117,499 81199B92
Skandia Forsikring (rights) 114,600 130,893 83055592
Skandia International Holding Co. AB
ADR 114,600 2,061,178 83055510
Skandinaviska Enskilda Banken Class A
Free shares 1,178,600 8,123,371 88099222
Skanska Class B (b) 487,200 12,024,734 93899392
Volvo Aktiebolaget Class B 160,700 15,000,157 92885630
73,486,825
SWITZERLAND - 5.7%
Adia SA (Bearer) 46,800 8,138,260 00699793
Alusuisse Lonza (Reg.) 33,611 16,288,693 02239994
Baloise Holding (Reg.) (b) 6,700 12,271,674 05899195
C.S. Holdings (Reg.) (b) 135,600 11,548,445 17599795
Ciba-Geigy AG:
(Reg.) 36,665 21,871,222 17199492
(warrants) (b) 1,480 10,548 17199494
Fischer (Georg) AG (Reg.) 23,300 4,616,328 33771192
Globus Magazine Part. Cert. 9,400 6,263,764 37957792
Holderbank Financiere AG PC (Bearer) 28,325 19,379,254 43479593
Surveillance, Societe Generale (Bearer) (b) 1,690 2,541,353 86901193
Swiss Bank Corp. (Bearer) (b) 31,050 8,674,482 87083610
Von Roll AG (Reg.) 17,350 1,854,755 94599094
113,458,778
SHARES VALUE (NOTE 1)
THAILAND - 0.2%
Phatra Thanakit (For. Reg.) 11,300 $ 384,146 71799593
Ruam Pattana Fund II (For. Reg.) 2,683,000 1,571,648 76999523
Ruang Khao Unit Trust (For. Reg.) (b) 2,633,900 1,647,504 77399393
3,603,298
UNITED KINGDOM - 8.8%
Avon Rubber 147,800 1,356,934 05399010
BET Public Ltd. Co. Ord. 4,570,000 8,599,369 05538H10
Barclays PLC Ord. 1,396,700 10,809,410 06738E10
Bass PLC Ord. 753,400 6,505,293 06990492
British Petroleum PLC Ord. 1,296,300 7,593,142 11088910
British Steel PLC Ord. 6,075,300 14,059,399 11101510
British Vita Ord. 1,115,900 5,198,677 11199192
English China Clay PLC 1,248,800 9,153,117 29321792
Forte PLC (b) 1,521,100 5,470,606 34999592
General Electric PLC Ord. 1,165,100 5,357,165 36963940
Great Universal Stores PLC Ord. Class A 658,400 5,994,732 39133420
Ladbroke Group PLC Ord. 4,086,800 11,504,179 50572799
Lloyds Abbey Life 589,200 3,384,212 53801099
London International Group 783,900 1,249,051 54183310
Midlands Electricity PLC 856,200 7,405,916 59780293
National Westminster Bank PLC Ord. 918,080 6,290,234 63853930
North West Water Ord. 721,600 5,288,989 67299195
RTZ Corp. PLC Ord. (b) 273,400 3,509,923 74974K50
Rolls Royce Ltd. Ord. 1,600,399 4,942,208 77577910
Royale Insurance Co. Ltd. 825,500 3,294,595 78074910
Sainsbury J. PLC Ord. 501,200 2,829,324 78710310
Sedgwick Group 307,400 918,966 81482610
Shanks & McEwan Group PLC 704,200 1,143,431 81999294
Taylor Woodrow PLC 1,177,500 2,644,547 87667410
Trafalgar House PLC Ord. 1,020,900 1,626,682 89270710
Vickers PLC Ord. units 5,188,775 15,747,932 92549310
Vodafone Group PLC 490,000 4,041,329 92857T92
Whitbread Class A 1,346,600 11,116,452 96341499
Willis Coroon PLC Ord. (b) 1,760,900 6,145,866 97062410
173,181,680
TOTAL COMMON STOCKS
(Cost $1,237,442,272) . . . . . . . . . . . . . . . . . . . .
1,516,435,139
NONCONVERTIBLE PREFERRED STOCKS - 4.8%
AUSTRIA - 0.6%
Creditanstaldt Bank (b) 160,500 9,435,895 22539210
Maculan Holding Ord. 18,300 1,762,660 55699594
11,198,555
GERMANY - 0.7%
Boss (Hugo) AG 4,250 2,703,144 44451094
FAG Kugelfischer Georg Schaef 35,200 5,022,491 50105492
Porsche AG Ord. 10,300 5,436,457 73380110
13,162,092
ITALY - 3.4%
Banco Ambro Veneto N/C Risp 2,320,900 4,873,844 06399592
Fiat Spa Priv. cumulative 5,409,600 15,061,462 31562120
Gilardini Risp Spa 460,400 926,187 40099392
SAI (Sta. Assicur. Industriale) N/C Risp 1,190,200 9,217,016 78399192
SIP (Societa Ital. Per L'Eser) Spa Di Risp
N/C Ord. 350,000 866,323 78401796
Stet (Societa Finanziaria
Telefonica Spa) 10,868,400 35,571,730 85982592
Unicem Di Risp 368,900 1,884,367 91199792
68,400,929
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - 0.1%.
Korea First Securities Co. (b) 67,462 $ 1,261,205 50099K23
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $58,784,694) 94,022,781
CORPORATE BONDS - 0.1%
MOODY'S RATINGS PRINCIPAL
AMOUNT (A)
CONVERTIBLE BONDS - 0.1%
GRAND CAYMAN - 0.1%
Bangkok Land euro 4 1/2%,
10/13/03 (c) - $ 600,000 531,000 06099LAA
CTII Overseas Finance Ltd. euro
4 1/4%, 11/18/98 (c) - 605,000 490,050 126995AA
Peregrine Investment Financial
Cayman Ltd. 4 1/2%,
12/1/00 (c) - 1,200,000 954,000 693393AA
TOTAL CORPORATE BONDS
(Cost $2,405,000) 1,975,050
GOVERNMENT OBLIGATIONS (F) - 1.9%
ARGENTINA - 0.5%
Argentina Republic BOCON
4%, 4/1/01 (d) B1 14,720,251 10,298,435 039995AF
BRAZIL - 0.5%
Brazil Federative Republic IDU
euro 4.3125%, 1/1/01 (d) B2 13,315,500 9,670,382 1057569E
DENMARK - 0.5%
Danish Government Bullet 7%,
12/15/04 Aa1 DKK 62,500,000 9,504,845 249998AV
FRANCE - 0.4%
French Government Strips
0%, 4/25/23 Aaa FRF 420,000,000 8,618,232 351996BL
TOTAL GOVERNMENT OBLIGATIONS
(Cost $40,691,887) 38,091,894
INDEXED SECURITIES - 0.6%
UNITED STATES OF AMERICA - 0.6%
Bankers Trust Company 0%,
1/31/95 (coupon inversely
indexed to STIBOR and
principal indexed to value of
2-year Swedish securities,
both multiplied by 9) (e) 1,000,000 569,500 06699DAC
Bayerische Landesbank cert. of
dep. 6.2675%, 1/27/95
(coupon inversely indexed
to HELIBOR and principal
indexed to value of 2-year
Finnish securities, both
multiplied by 8) (e) 8,300,000 5,121,100 072999AU
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
Citibank Nassau:
0%, 1/31/95 (coupon
inversely indexed to STIBOR
and principal indexed to
2-year Swedish securities,
both multiplied by 9) (e) $ 700,000 $ 412,860 223991BT
4 5/8%, 7/30/96 (inversely
indexed to 1-year SEK
swap rate, multiplied
by 10) (d) 1,125,000 883,462 223991AH
ITT Corp. 3.66%, 6/27/94
(inversely indexed to 1-year
SEK swap rate, multiplied
by 10) 5,000,000 4,800,500 4506799M
TOTAL INDEXED SECURITIES
(Cost $16,125,000) 11,787,422
REPURCHASE AGREEMENTS - 15.8%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 311,756,460 311,664,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,667,112,853) . . . . . . . . . . . . . . . . . . . .
$1,973,976,286
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
1,172,422,435 BEF 5/4/94 $ 34,366,702 $ 661,874
75,419,000 CHF 5/9/94 53,748,628 965,621
79,820,931 DKK 5/16/94 12,304,070 281,759
3,956,826,000 ESP 5/3/94 29,377,717 625,057
59,195,000 FIM 5/5/94 11,049,038 457,129
73,880,000 NOK 5/2/94 10,308,574 221,328
90,507,500 SEK 5/5/94 11,874,866 459,043
TOTAL CONTRACTS TO BUY
(Payable amount $159,357,784) $ 163,029,595 $ 3,671,811
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 8.3%
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
1,172,422,435 BEF 5/4/94 $ 34,366,702 $ (1,797,150)
75,419,000 CHF 5/9/94 53,748,628 (1,847,202)
79,820,931 DKK 5/16/94 12,304,070 (540,441)
3,956,826,000 ESP 5/3/94 29,377,717 (1,591,505)
59,195,000 FIM 5/5/94 11,049,038 (377,504)
425,178,909 FRF 5/16/94 75,076,044 (2,941,532)
5,889,637,000 JPY 7/6/94 58,230,216 (1,230,216)
21,434,577 NLG 6/13/94 11,529,049 (113,226)
73,880,000 NOK 5/2/94 10,308,574 (433,549)
90,507,500 SEK 5/5/94 11,874,866 (547,978)
TOTAL CONTRACTS TO SELL
(Receivable amount $296,444,601) $ 307,864,904 $ (11,420,303)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 15.6%
CURRENCY ABBREVIATIONS
BEF - Belgian franc
DKK - Danish krone
NLG - Dutch guilder
FIM - Finnish markka
FRF - French franc
JPY - Japanese yen
NOK - Norwegian krone
ESP - Spanish peseta
SEK - Swedish krona
CHF - Swiss franc
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $12,722,719 or 0.6% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Inverse floating rate security is a security where the coupon is
inversely indexed to a floating interest rate multiplied by a specified
factor. If the floating rate is high enough, the coupon rate may be zero or
be a negative amount that is carried forward to reduce future interest
and/or principal payments. The price may be considerably more volatile than
the price of a comparable fixed rate security.
6. For some foreign government obligations have not been rated by S&P
or Moody's. The ratings listed are assigned to securities by FMR, the
fund's investment adviser, based principally on S&P and Moody's ratings
of the sovereign credit of the issuing government.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $650,869,056 and $496,426,949, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $3,822 for the period.
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $1,667,315,363. Net unrealized appreciation aggregated
$306,660,923, of which $342,407,559 related to appreciated investment
securities and $35,746,636 related to depreciated investment securities.
At October 31, 1993, the fund had a capital loss carryforward of
approximately $46,417,000 which will expire on October 31, 2001.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 0.3%
Basic Industries 11.4
Conglomerates 0.2
Construction & Real Estate 4.4
Durables 12.6
Energy 3.6
Finance 17.5
Government Obligations 1.9
Health 1.6
Industrial Machinery & Equipment 3.8
Media & Leisure 2.1
Nondurables 1.9
Precious Metals 0.1
Repurchase Agreements 15.8
Retail & Wholesale 2.0
Services 2.4
Technology 7.6
Transportation 3.0
Utilities 7.8
100.0%
OVERSEAS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
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APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value
(including repurchase agreements of $311,664,000) (cost $1,667,112,853)
$ 1,973,976,286
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value (cost $159,357,784)
(Note 2)163,029,595
Short foreign currency contracts
$ (307,864,904
(Note 2))
Contracts held, at value
Receivable for contracts held
296,444,601 (11,420,303)
Cash
121,399
Receivable for investments sold
12,880,917
Receivable for fund shares sold
10,546,710
Dividends receivable
5,220,075
Interest receivable
916,851
Other receivables
15,417
TOTAL ASSETS
2,155,286,947
LIABILITIES
Payable for foreign currency contracts held (Note 2)
159,357,784
Payable for investments purchased
28,615,163
Payable for fund shares redeemed
2,940,025
Accrued management fee
1,328,718
Other payables and accrued expenses
1,308,601
TOTAL LIABILITIES
193,550,291
NET ASSETS
1,961,736,656
Net Assets consist of (Note 1)
Paid in capital
1,647,091,794
Distributions in excess of net investment income
(14,895,486)
Accumulated undistributed net realized gain (loss) on investments
30,425,407
Net unrealized appreciation (depreciation) on:
Investment securities
306,863,433
Foreign currency contracts
(7,748,492)
NET ASSETS, for 67,780,950 shares outstanding
1,961,736,656
NET ASSET VALUE and redemption price per share ($1,961,736,656
(divided by) 67,780,950 shares) (Note 4) $28.94
Maximum offering price per share (100/97.00 of $28.94) (Note 4)
$29.84
</TABLE>
STATEMENT OF OPERATIONS
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SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 11,298,515
Dividends
Interest 5,135,710
16,434,225
Less foreign taxes withheld (Note 1) (911,587
)
TOTAL INCOME 15,522,638
EXPENSES
Management fee (Note 4) $ 6,432,030
Basic fee
Performance adjustment 264,345
Transfer agent fees (Note 4) 2,608,135
Accounting fees and expenses 330,062
(Note 4)
Non-interested trustees' compensation 4,909
Custodian fees and expenses 736,020
Registration fees 99,284
Audit 42,759
Legal 11,508
Miscellaneous 8,439
TOTAL EXPENSES 10,537,491
NET INVESTMENT INCOME 4,985,147
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 78,583,929
Foreign currency contracts (1,547,765 77,036,164
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 58,545,163
Foreign currency contracts (11,307,078 47,238,085
)
NET GAIN (LOSS) 124,274,249
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 129,259,396
OTHER INFORMATION $997,546
Sales charges paid to FDC (Note 4)
Accounting fees paid to $330,034
FSC (Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
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INCREASE (DECREASE) IN NET ASSETS
SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations
$ 4,985,147 $ 10,233,528
Net investment income
Net realized gain (loss) on investments
77,036,164 (49,776,636)
Change in net unrealized appreciation (depreciation) on investments
47,238,085 370,524,952
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS
129,259,396 330,981,844
Distributions to shareholders
(13,783,657) (11,187,669)
From net investment income
In excess of net investment income
(9,769,269) -
From net realized gain
- - - (75,938,524)
TOTAL DISTRIBUTIONS
(23,552,926) (87,126,193)
Share transactions
865,135,868 854,803,474
Net proceeds from sales of shares
Reinvestment of distributions
22,885,934 84,813,750
Cost of shares redeemed
(522,657,933) (494,651,306)
Net increase (decrease) in net assets resulting
from share transactions
365,363,869 444,965,918
TOTAL INCREASE (DECREASE) IN NET ASSETS
471,070,339 688,821,569
NET ASSETS
Beginning of period
1,490,666,317 801,844,748
End of period (including under (over) distribution
of net investment income of $(14,895,486) and
$ 1,961,736,656 $ 1,490,666,317
$7,779,873, respectively)
OTHER INFORMATION
Shares
Sold
30,931,925 35,327,981
Issued in reinvestment of distributions
855,350 4,255,602
Redeemed
(18,895,005) (21,200,545)
Net increase (decrease)
12,892,270 18,383,038
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF
THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
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SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
1993 1992 1991 1990 1989
Net asset value, beginning of period
$ 27.16 $ 21.96 $ 26.92 $ 27.47 $ 26.30 $ 25.30
Income from Investment Operations
Net investment income
.14 .27 .46 .54(sub section) .35 .30
Net realized and unrealized gain (loss) on investments
2.07 7.40 (3.82) .45 2.16 1.28
Total from investment operations
2.21 7.67 (3.36) .99 2.51 1.58
Less Distributions
From net investment income
(.25) (.37) (.44) (.46) (.21) (.24)
In excess of net investment income
(.18) - - -
From net realized gain
- - - (2.10) (1.16) (1.08) (1.13) (.34)
Total distributions
(.43) (2.47) (1.60) (1.54) (1.34) (.58)
Net asset value, end of period
$ 28.94 $ 27.16 $ 21.96 $ 26.92 $ 27.47 $ 26.30
TOTAL RETURN (dagger)
8.27% 39.01% (13.05)% 4.12% 9.58% 6.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000s omitted)
$ 1,961,737 $ 1,490,666 $ 801,845 $ 969,436 $ 1,011,152 $ 876,567
Ratio of expenses to average net assets
1.28%* 1.27% 1.52% 1.53% 1.26% 1.06%
Ratio of net investment income to average net assets
.61%* 1.00% 1.78% 2.19% 1.34% 1.06%
Portfolio turnover rate
67%* 64% 122% 132% 96% 100%
* ANNUALIZED
(tri) AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE
OF EQUALIZATION ACCOUNTING.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE
AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
(sub section) INCLUDES $.08 PER SHARE FROM RECOVERY OF FOREIGN
TAXES PREVIOUSLY WITHHELD ON DIVIDEND AND INTEREST PAYMENTS.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON
FOREIGN CURRENCY RELATED TRANSACTIONS TAXABLE AS ORDINARY INCOME.
</TABLE>
WORLDWIDE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Worldwide has a
3% sales charge, which has been waived through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
WORLDWIDE 9.40% 25.19% 46.26%
WORLDWIDE
(INCL. 3% SALES CHARGE) 6.11% 21.44% 41.87%
Morgan Stanley World Index 2.57% 11.85% 27.20%
Average Global Fund 3.70% 18.64% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on May 30, 1990. You can compare the fund's figures to the
performance of the Morgan Stanley World index, a broad measure of the
performance of stocks across the world, weighted by each country's market
capitalization (or the total value of its outstanding shares). You can also
compare the fund's performance to the average global fund, which reflects
the performance of 99 funds with similar objectives tracked by Lipper
Analytical Services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
WORLDWIDE 25.19% 10.18%
WORLDWIDE
(INCL. 3% SALES CHARGE) 21.44% 9.32%
Morgan Stanley World Index 11.85% 6.33%
Average Global Fund 18.64% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Worldwide (318) MS World Index
05/30/90 9700.00 10000.00
05/31/90 9729.10 10038.61
06/30/90 9981.30 9964.14
07/31/90 10252.90 10051.93
08/31/90 9098.60 9108.00
09/30/90 8196.50 8144.51
10/31/90 8681.50 8901.68
11/30/90 8681.50 8752.34
12/31/90 8631.28 8932.45
01/31/91 8875.93 9255.96
02/28/91 9365.23 10109.62
03/31/91 9042.29 9808.57
04/30/91 9130.37 9882.21
05/31/91 9198.87 10103.10
06/30/91 8543.20 9476.34
07/31/91 9071.65 9920.84
08/31/91 9208.65 9886.25
09/30/91 9365.23 10142.44
10/31/91 9404.37 10303.82
11/30/91 8905.29 9851.69
12/31/91 9311.08 10565.69
01/31/92 9410.03 10366.97
02/29/92 9696.98 10184.99
03/31/92 9469.40 9702.08
04/30/92 9884.99 9834.16
05/31/92 10300.57 10222.20
06/30/92 9944.35 9876.60
07/31/92 9845.41 9898.58
08/31/92 9706.88 10136.03
09/30/92 9706.88 10039.86
10/31/92 9528.77 9764.70
11/30/92 9677.19 9936.32
12/31/92 9889.02 10013.50
01/31/93 10214.25 10043.98
02/28/93 10458.17 10278.91
03/31/93 11057.81 10871.83
04/30/93 11332.22 11372.70
05/31/93 11687.94 11631.78
06/30/93 11565.98 11531.21
07/31/93 11820.07 11765.78
08/31/93 12562.00 12302.20
09/30/93 12429.87 12071.96
10/31/93 12968.54 12401.72
11/30/93 12734.78 11697.27
12/31/93 13503.03 12266.78
01/31/94 14466.79 13072.98
02/28/94 14249.17 12900.91
03/31/94 13710.29 12341.84
04/30/94 14186.99 12720.47
Let's say you invested $10,000 in Fidelity Worldwide Fund on its start date
and paid a 3% sales charge. By April 30, 1994, it would have grown to
$14,187 - a 41.87% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley World index, which would have grown
to $12,720 over the same period - a 27.20% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
WORLDWIDE
FUND TALK: THE MANAGER'S OVERVIEW
Interview with Penny Dobkin,
Manager of Fidelity Worldwide Fund
Q. PENNY, HOW DID THE FUND PERFORM?
A. Better than its peers. For the six months ended April 30, 1994, Fidelity
Worldwide's total return was 9.40%, compared to 3.70% for the average
global fund, according to Lipper Analytical Services. Over the past 12
months the fund also enjoyed superior performance: 25.19%, compared to the
group average of 18.64%.
Q. WHY DID FIDELITY WORLDWIDE DO SO MUCH BETTER THAN MOST OTHER GLOBAL
FUNDS?
A. Ordinarily the answer to a question like that would begin with a rundown
of the fund's most successful investments. The fund did make profitable
choices, and I'll gladly describe some of them later. But in recent months
- - - particularly since the Federal Reserve raised interest rates on February
4 - the key to achieving above-average performance has been avoiding the
problem countries. Among the biggest losers lately have been Hong Kong and
Malaysia. Last October, when both markets were in the midst of dramatic
run-ups, I regretted having reduced the fund's stake in those countries to
3% of assets. Since then, however, the fund's limited exposure has been a
definite advantage.
Q. YOU'VE GENERALLY AVOIDED MAKING LARGE INVESTMENTS IN EMERGING MARKETS
ALL OVER THE WORLD, NOT JUST IN SOUTHEAST ASIA. WHY?
A. I certainly haven't skipped them entirely. Six months ago, about 15% of
the fund's investments were in developing countries. At the end of April,
the total was about 11%. Most of the investments were spread among
developing countries in Asia and Latin America. Only Mexico, with 4.6% of
the fund's investments, represented a sizable position all by itself. (Most
of the fund's Mexican investments, I should point out, were not winners
during the period, due to the uprising in Chiapas and the political turmoil
that followed.) But I don't want to give the impression that I'm forever
biased against emerging markets. I have been skeptical about earnings
estimates for many companies in emerging markets and believed that
investors were paying too high a price for low-confidence forecasts.
However, emerging markets have lost so much ground these last few months,
it may soon be time to consider increasing the fund's positions.
Q. WHERE HAVE YOU FOUND THE MOST WINNERS DURING THE PAST SIX MONTHS?
A. In Europe. European investments as a percentage of the fund's total
investments rose from 40% last October to 44% at the end of April. That
represents a larger slice of the fund by far than any other region. The
increase may not seem like much in percentage terms, but the fund's assets
have grown during the same period by more than 80%. I've been buying
heavily in Europe as cash has come into the fund.
Q. IS THERE A THEME BEHIND THE FUND'S EUROPEAN INVESTMENTS?
A. Yes, small company stocks. Small company stocks under-performed large
company stocks in Europe from 1989 through the middle of 1993, but since
then the trend has reversed. The fund has had success with consumer stocks
like Escada, an apparel company, and Marieberg, a Swedish newspaper
publisher. But the cyclical stocks are more exciting, since their
performance mirrors the performance of the economy. The ones I've bought
recently aren't well known, but they have helped the fund significantly:
companies like Munksjo, a Swedish paper and packaging concern; Von Moos, a
Swiss steel producer; and Bremer Vulkan, a German shipbuilder. What have
been difficult for the fund in Europe are interest-rate sensitive stocks,
particularly the Spanish banks. I still think they have good earnings
growth prospects as the Spanish economy improves, since they have not yet
benefited from lower loan losses. The important thing to remember about
small company stocks in Europe is that many of them are still cheap.
They've been outperforming for less than a year, and these cycles tend to
run a long time.
Q. WHILE MOST WORLD MARKETS ARE DOWN SINCE THE BEGINNING OF THE YEAR,
JAPAN'S NIKKEI AVERAGE IS UP THROUGH APRIL. WERE JAPANESE STOCKS A FACTOR
IN THE FUND'S SUCCESS?
A. Not really. Japanese stocks were only about 14% of the fund at the end
of April, or less than half Japan's overall weighting in the global market.
Many of the big winners in Japan were exporters. But apart from the auto
sector, I generally avoided the export stocks. My focus was on domestic
sectors like department stores, which also did well. If I missed a
short-term opportunity on the export side, it's because I have a hard time
believing the yen will depreciate enough to allow exporters to greatly
improve earnings this year.
Q. WHAT ABOUT THE FUND'S U.S. INVESTMENTS?
A. At the end of April, U.S. investments, other than short-term
investments, totaled about 15%, down slightly from 18% last October. I've
been playing the consumer theme here also, with investments in department
stores like Dayton Hudson and apparel companies like Liz Claiborne. I still
own some oil stocks, including Kerr-McGee and Amerada Hess; and lately I've
added a couple of cheap drug stocks with strong product lines, notably
Schering-Plough and Pfizer. But my largest U.S. stock is IBM. The company's
continuing cost-cutting effort is far more meaningful than the market has
wanted to believe. IBM is a huge stock that's currently underweighted in
the portfolios of most institutional investors. Once the institutions run
out of reasons not to like IBM anymore, they'll have to start buying again.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. The fund has the authority to use derivatives to help manage its
investments more efficiently. About 2% of the fund was hedged against
currency risks using derivatives, in this case currency forward contracts,
at the end of the period.
Q. WHAT'S THE OUTLOOK FOR THE FUND?
A. I don't think it's as positive as it was six months ago. Back then, I
often found that after visiting a company, the first thing I wanted to do
was find a phone and put in a buy order. That doesn't happen as much
anymore. Increasingly, I'm coming up with earnings projections that suggest
stocks are already selling at reasonable prices, with limited upside
potential. There are exceptions, of course - notably, the small company
stocks in Europe I spoke of earlier. But large stocks in Europe look
expensive to me, and I wouldn't be surprised to see them do nothing for the
remainder of the year. If there's one place I'd be most likely to increase
the fund's stake in the months ahead, it's the United States. It could be a
fourth-quarter story rather than a summer story but suddenly the United
States looks like one of the cheaper markets in the world. Whatever
happens, though, no one should expect the fund to deliver another year of
better than 20% returns.
FUND FACTS
GOAL: to increase the value of the fund's shares
by investing mainly in common stocks from
around the world
START DATE: May 30, 1990
SIZE: as of April 30, 1994, more than $526 million
MANAGER: Penelope Dobkin, since May 1990;
manager, Fidelity Europe Fund, 1986-1990;
Fidelity United Kingdom Fund, 1987-1989;
Fidelity Select Financial Services Portfolio,
1983-1986; analyst, banking and real estate;
joined Fidelity in 1980
(checkmark)
PENNY DOBKIN ON RECENT SHIFTS IN WORLD MARKETS:
"There were at least four significant developments
during the past six months, all of which have
contributed to a high level of uncertainty in world
markets. One, interest rates rose around the world,
with long rates rising more sharply than short rates
in most countries. Two, after a year of stunning
gains, many emerging markets around the world
stalled in January, and fell sharply along with other
world markets following the February decision by
the Federal Reserve to raise U.S. interest rates.
Third, the dollar weakened in relation to most major
currencies, defying the consensus view of most
analysts that it would strengthen. And finally, political
turmoil in Mexico led to a dramatic sell-off of
Mexican stocks and bonds, spoiling the mood of
euphoria that accompanied passage of the North
American Free Trade Agreement last fall. As a
result, so far in 1994, performance has been as
much a function of the investments you avoided as
the investments you made."
(bullet) European investments totalled 44% of the fund at
the end of April. Sweden and Germany led all other
countries in Europe, accounting for 7.6% and 7.6%
of the fund, respectively. Other European countries
with at least 3% of the fund's investments were the
Netherlands (5.3%), France (4.3%), Switzerland
(3.9%) and the United Kingdom (3.5%).
(bullet) Investments in most European countries rose or
remained stable over the past six months. The
exception was the U.K., where the fund sold
property stocks at a profit. The fund still owns
property stocks in France, but so far their
performance has been disappointing.
(bullet) Mexico led all other emerging markets in the fund,
with 4.6% of investments at the end of April, followed
by Argentina (1.7%), Hong Kong (0.8%), Singapore
(0.7%) and India (0.7%).
(bullet) Short-term investments as a percentage of the
fund's total investments were 16% at the end of
April. That was up slightly from 14% last October,
but still within the fund's neutral range.
WORLDWIDE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
France 4.3%
Row: 1, Col: 1, Value: 30.8
Row: 1, Col: 2, Value: 3.5
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 7.6
Row: 1, Col: 5, Value: 3.0
Row: 1, Col: 6, Value: 15.1
Row: 1, Col: 7, Value: 5.3
Row: 1, Col: 8, Value: 4.6
Row: 1, Col: 9, Value: 14.3
Row: 1, Col: 10, Value: 7.6
Row: 1, Col: 11, Value: 4.3
Germany 7.6%
United States 30.8%
Japan 14.3%
Mexico 4.6%
United
Kingdom 3.5%
Netherlands 5.3%
Switzerland 3.9%
Sweden 7.6%
Other 15.1%
Spain 3.0%
AS OF OCTOBER 31, 1993
Finland 2.2%
Row: 1, Col: 1, Value: 32.5
Row: 1, Col: 2, Value: 5.9
Row: 1, Col: 3, Value: 4.4
Row: 1, Col: 4, Value: 4.0
Row: 1, Col: 5, Value: 3.3
Row: 1, Col: 6, Value: 10.1
Row: 1, Col: 7, Value: 2.6
Row: 1, Col: 8, Value: 6.8
Row: 1, Col: 9, Value: 7.4
Row: 1, Col: 10, Value: 11.4
Row: 1, Col: 11, Value: 2.4
Row: 1, Col: 12, Value: 4.8
Row: 1, Col: 13, Value: 2.2
Row: 1, Col: 14, Value: 2.2
France 2.2%
Germany 4.8%
United States 32.5%
Hong Kong 2.4%
Japan 11.4%
Mexico 7.4%
United
Kingdom 5.9%
Netherlands 6.8%
Switzerland 4.4%
Norway 2.6%
Sweden 4.0%
Other 10.1%
Spain 3.3%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 80.1 80.4
Bonds 3.8 5.6
Short-term investments 16.1 14.0
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Grupo Tribasa SA de CV
sponsored ADR 1.5 2.0
(Mexico, Construction)
Bremer Vulkan AG
(Germany, Ship Building & Repair) 1.2 -
Escada AG (non-vtg.)
(Germany, Textiles & Apparel) 1.0 -
Munksjo AB
(Sweden, Paper & Forest Products) 1.0 -
Bail Investissement
(France, Real Estate) 0.9 0.4
Fidis Spa Ord.
(Italy, Credit & Other Finance) 0.9 -
Marieberg Tidnings A
(Sweden, Publishing) 0.8 1.1
Rottneros Bruk AB Free shares
(Sweden, Paper & Forest Products) 0.8 -
Unidanmark AS Class A
(Demark, Banks) 0.8 -
Von Moos Holdings AG Ord.
(Switzerland, Iron & Steel) 0.8 -
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 18.9 17.9
Construction & Real Estate 12.5 11.8
Basic Industries 10.2 9.4
Retail & Wholesale 8.6 7.7
Durables 8.5 7.6
Energy 3.7 4.5
Media & Leisure 3.1 3.8
Technology 3.1 2.1
Industrial Machinery & Equipment 3.0 3.8
Transportation 2.1 2.7
WORLDWIDE
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 75.8%
SHARES VALUE (NOTE 1)
ARGENTINA - 0.1%
Cinba SA Ord. 131,159 $ 420,550 17899B92
AUSTRALIA - 0.2%
Fosters Brewing Group Ltd. 1,212,500 1,066,782 35025810
BELGIUM - 0.5%
GB-INNO-BM SA GIB 50,000 2,301,614 36149699
DENMARK - 0.8%
Burmeister & Wain Holdings AS,
Series B (New) 3,120 209,436 12299296
Unidanmark AS Class A 115,000 4,063,830 92399792
4,273,266
FINLAND - 1.6%
Enso Gutzeit OY R Free shares 195,000 1,397,941 29357810
Kansallis-Osake-Pankki 585,000 1,321,492 48199210
Kone Corp. Class B Ord. 13,000 1,509,582 50400092
Repola OY 87,600 1,556,912 75999A92
Unitas Bank Ltd. 90499122:
A Free shares 270,000 766,179
B Free shares 591,700 1,579,650 90499123
8,131,756
FRANCE - 4.3%
Bail Investissement (b) 27,300 4,680,276 05699092
Coflexip sponsored ADR 108,000 2,443,500 19238410
Immeubles de France, Ste Des (b) 37,655 3,760,176 44999C22
Klepierre SA (b) 34,400 3,842,489 49899822
Pechiney SA CIP 27,000 1,918,346 70599310
UFB Locabail SA 34,000 2,571,933 90499592
Unibail (b) 28,000 2,523,860 90599B92
21,740,580
GERMANY - 4.1%
Bayer AG 7,200 1,714,244 07273010
Bremer Vulkan AG 98,000 5,925,030 10689999
Commerzbank (Rfd) 250 52,600 20299033
Commerzbank AG 2,509 544,577 20259710
Deutsche Babcock AG 5,500 888,513 25159991
Deutsche Bank AG (warrants) (b) 9,500 1,404,897 25152596
Felten & Guilleaume Enrg. AG (b) 1,900 416,415 31499292
Herlitz AG 2,800 709,311 42799392
Hoesch AG 3,100 412,334 43438199
Karstadt AG DM 50 3,000 1,140,871 48576499
Linotype-Hell AG (Bearer) (b) 6,400 1,509,069 53599092
Mannesmann AG (Rfd.) 912 256,948 56311595
Mannesmann AG Ord. 7,300 2,085,399 56377510
Rheinhold & Mahla AG 6,200 1,450,665 76299692
Sixt AG 16,000 1,033,132 83002195
Sixt AG Ord. (b) 748 246,469 83002199
Thyssen AG Ord. 4,200 727,001 88629110
20,517,475
HONG KONG - 0.8%
First Pacific Co. Ltd. 2,428,000 1,092,260 33699192
Fortei Holdings Ltd. 7,012,000 1,397,912 34999D22
Kong Wah Holdings Ltd. (b) 2,520,000 544,799 50599B92
Kumagai Gumi (b) 922,000 978,731 50099210
4,013,702
INDIA - 0.7%
Arvind Mills Ltd. units (c) 210,800 1,159,400 04334810
Indian Aluminum Ltd. GDR (c) 273,700 2,189,600 45410110
3,349,000
INDONESIA - 0.6%
Astra International (For. Reg.) 11,000 83,653 04699894
Bank Dagang Nas Indonesia PT 45,500 66,461 06099Q22
SHARES VALUE (NOTE 1)
Barito Pacific Timber (For. Reg.) (b) 171,000 $ 681,927 06799F23
Dharmala International Land 975,000 1,695,427 25399592
Pan Brothers Textile PT 900,000 573,840 69799492
3,101,308
IRELAND - 0.1%
Aran Energy (b) 1,536,000 675,963 03899999
ITALY - 2.7%
Cementerie di Sardegna Spa 538,000 2,663,321 15199F22
Cogefar-Impresit Cost Gen Spa 1,300,000 2,106,923 19199092
Consorzio di Credit Oper. Pubbl.
(Cogefar) (warrants) 1,300,000 1,459,263 21099922
Fidis Spa Ord. 1,100,000 4,550,601 31650010
Fila Holding Spa sponsored ADR (b) 153,000 2,122,875 31685010
Istituto Mobiliare Italiano 24,000 199,026 45777M92
Simint Ord. (b) 465,600 518,827 83799492
13,620,836
JAPAN - 14.3%
Akita Bank 132,000 949,079 00999692
Aomori Bank Ltd. 260,000 1,633,804 02399592
Bandai Co. Ltd. 46,800 2,060,436 06099192
Bank of the Ryukyus 17,000 971,141 83499192
Bridgestone Corp. 155,000 2,320,497 10844110
Charle Co. Ltd. 55,000 1,327,194 15999392
Daiichi Corp. Ord. 122,000 3,136,216 23599B92
Daito Trust Construction 76,000 2,021,078 24999492
Daiwa Securities 96,000 1,503,398 23499010
Fuji Distribution Co. 182,600 1,501,733 36299992
Fukushima Bank Ltd. 287,000 1,580,153 36099A92
Hankyu Department Stores, Inc. 167,000 2,171,180 41099192
Hanshin Department Store 403,000 3,175,414 41199292
Higo Bank Ltd. Ord. 178,000 1,362,218 43299192
Hyogo Bank Ltd. 392,000 1,304,995 44999292
Iwate Bank 32,000 1,733,478 45699392
Joyfull Co. Ltd. (b) 39,000 852,753 49499F22
Kanamoto Co. Ltd. 51,000 1,537,083 48399B22
Kaneshita Construction Co. Ltd. Ord. (b) 145,000 2,513,543 49099592
Kanto Auto Works Co. Ltd., Yokosuka 202,000 1,378,765 48599092
Keio Teito Electric Railway (b) 234,000 1,288,348 48766710
Kenwood Corp. 99,000 857,096 49178692
Koa Fire & Marine Insurance Co. Ltd. 167,000 1,157,963 49999010
Kumagai Gumi Co. Ltd. (warrants) 7,600 570,000 50125193
Matsuya Co. Ltd. 181,000 1,167,685 57699E22
Mazda Motor Corp. (b) 255,000 1,326,110 57878592
Michinoku Bank 195,000 1,569,142 59499392
Mitsubishi Motors Corp. (b) 198,000 1,751,247 60899692
Mitsubishi Trust & Banking 105,000 1,551,266 60699410
Namura Shipbuilding (b) 90,000 640,894 62999892
Nichii Co. Ltd. 66,000 1,001,083 65299110
Nomura Securities Co. Ltd. 117,000 2,546,735 65536130
Onward Kashiyama Co. Ltd.
(warrants) (b) 850 977,500 48551393
Shimzu Bank Ltd. 29,000 2,230,769 82499592
Sogo Co. Ltd. 387,000 2,515,709 83599K22
Sony Corp. ADR 21,000 1,173,375 83569930
Sumitomo Marine and Fire 220,000 2,136,512 94599392
Sumitomo Trust & Banking Co. 134,000 1,847,730 86599310
Tachi-S Co. Ltd. 120,000 1,157,096 88099392
Tobu Railway Co. Ltd. (warrants) (b) 500 175,000 88739192
Toho Bank Ord. 195,000 1,402,048 91799192
Tokio Marine & Fire Insurance Co. Ltd.
(The) 110,000 1,408,451 88909099
Tokyo Nissan Auto Sales Co. Ltd. 262,000 2,528,908 88998599
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Tokyu Department Stores Co. Ltd. 364,000 $ 2,384,124 88914593
Toyoda Auto Loom Works Ltd. 130,000 2,240,718 89200910
72,639,667
LUXEMBOURG - 0.4%
Scandinavian Broadcasting Corp. (b) 71,000 1,828,250 80699E92
MEXICO - 3.7%
Banacci SA de CV:
Class B (b) 245,000 1,500,765 06399896
Class C 55,000 373,124 06399893
Class L (b) 92,000 624,134 06399895
Cemex SA, Series B 90,000 1,951,608 15299293
Grupo Carso SA de CV Class A-1 (b) 315,000 3,140,352 40099594
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 89,000 2,191,625 40048610
Grupo Tribasa SA de CV
sponsored AD R (b) 300,042 7,351,029 40049F10
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 29,000 1,707,375 87940378
18,840,012
NETHERLANDS - 5.3%
Akzo NV Ord. 10,400 1,253,154 01019910
Bam Groep NV 18,600 1,152,168 05999892
CVG (Crown Van Gelder) 26,000 2,247,778 12699292
Draka Holding NV 48,700 1,114,867 26199B22
Econosto NV 170,000 2,215,998 27903299
Geveke Trade 88,200 1,724,568 37431310
Heidemij NV (b) 100,400 1,066,750 42099522
Hoogovens en Staalfabrieken (b) 49,300 1,917,296 43888410
KBB (Kon Bijenkorf Beheer) NV:
Ord. 13,800 790,164 48130092
(rights) 13,800 5,947 48130095
Kempen & Company NV 269,000 1,999,568 48899D22
MacIntosh Confectionary Works (b) 62,000 2,043,846 58199292
Philips Electronics (b) 29,400 859,909 71833799
Pirelli Tyre Holdings NV Ord. (b) 171,500 1,708,996 72499092
Samas-Groep NV 57,250 1,788,580 79499110
Telegraaf 23,700 2,093,617 87940410
Volker Stevin NV 42,600 2,111,069 92868894
Wereldhave NV 8,800 522,359 95199E22
26,616,634
NORWAY - 2.3%
Bolig Og Naerings Banken 113,000 2,317,997 09799F22
Color Lines 312,600 1,265,039 19699492
Den Norske Bank Class A Free shares (b) 674,700 1,821,832 25299792
Mosvold Shipping AS B 221,700 1,299,368 62099294
Petroleum Geo Services AS (b) 53,000 739,593 71699E92
Smedvig AS 92,200 1,055,023 79799892
Smedvig AS (rights) 92,200 3,217 79799895
Sparebanken Norway Prime share
cert. (b) 75,000 1,412,902 84699E22
Vital Forsikring Free shares 186,500 1,899,848 93999692
11,814,819
PORTUGAL - 0.5%
Engil Soc. de Const. 21,000 307,934 29299192
Engil Soc. de Const. (New) 12,600 184,760 29299197
Mundicenter Soc Imobil SA 72,000 2,073,465 62699592
2,566,159
SINGAPORE - 0.7%
Jurong Cement (b) 1,110,000 3,355,197 48299792
SHARES VALUE (NOTE 1)
SOUTH AFRICA - 0.4%
Anglo American Corp. of South
Africa Ltd.:
ADR 10,000 $ 492,500 03486110
(Reg.) (b) 30,000 1,524,324 03486130
2,016,824
SPAIN - 2.9%
Banco Bilbao Vizcaya SA Ord. (Reg.) 154,600 3,692,026 05945891
Banco Central SA (Reg.) 101,000 2,205,682 05947010
Banco de Santander Ord. (Reg.) 8,000 351,792 05957410
Banco de Valencia SA (Reg.) 210,000 2,573,817
Banco Pastor SA (b) 80,475 3,777,917 05999792
Conservera Campo Frio 34,000 1,742,618 20899292
Hisalba (b) 15,000 268,524 46199592
14,612,376
SWEDEN - 7.4%
ASG AB Class B Free shares Ord. 79,700 1,360,229 16599C22
Arjo AB (c) 168,000 2,668,732 04069792
Avest Sheffield AB Ord. Free shares (b) 430,000 2,822,597 05399892
Catena AB Class A Free shares 140,000 1,157,920 14999G22
Celsius Industrier AB Class B 85,000 2,265,298 15199D22
Enator Information System AB B Free
shares (b) 312,600 1,723,648 29299H22
Foreningsbanken AB Ord. Class A (b) 683,000 1,416,733 34599E22
Hennes & Mauritz AB B Free shares 27,900 1,384,543 42599110
Hoganas AB Class B Free shares (c) 70,000 946,555 43899M22
Marieberg Tidnings A (b) 160,000 4,222,080 56799392
Munksjo AB 628,000 4,864,318 62599922
NCC AB B Free shares 479,000 3,835,976 63399192
Rottneros Bruk AB Free shares 4,000,000 4,201,080 77899522
Scribona AB B Free shares (b) 66,100 433,892 81199B92
Skanska Class B (b) 40,000 987,252 93899392
Trelleborg AB Class C Free shares 156,000 2,293,787 89491092
Trustor AB B Free shares 185,500 1,120,242 89899D22
37,704,882
SWITZERLAND - 3.9%
Bucher Holding AG (Bearer) 350 1,187,329 08699292
CS Holdings (Bearer) (b) 2,830 1,218,202 17599792
Globus Magazine Part. Cert. 1,800 1,199,444 37957792
Industrieholding Cham AG (Reg.) 1,500 1,207,996 85599922
Jelmoli Grand Magasins SA (Reg.) 15,000 1,662,331 47469993
Jelmoli Grands Magasins SA 1,150 686,812 47469910
Merkur Holdings AG Ord. (Reg.) 6,000 1,492,356 59099393
Reisebuero Kuoni Part. Cert. 1,400 2,195,061 75999592
SMH (Schweiz Gesel UHR) (Bearer) 3,500 2,120,229 80899294
Swiss Bank Corp. (Reg.) 10,936 1,519,809 87083694
Swiss Reinsurance Corp.:
(Reg.) (b) 1,500 639,276 87099393
A (warrants) (b) 1,500 5,078 87099D22
B (warrants) (b) 1,500 5,880 87099399
Von Moos Holdings AG Ord 33,500 4,034,850 94099293
Winterthur Schweiz (Reg.) 1,750 808,182 97629994
19,982,835
THAILAND - 0.2%
Eastern Wire Co. Ltd. (For. Reg.) 325,000 884,133 27799423
UNITED KINGDOM - 3.3%
Brown & Jackson PLC 19,000,000 1,513,730 11599092
Guinness PLC Ord. 160,000 1,164,226 40203310
Hammerson Property Investment &
Development Corp. PLC Ord. 194,333 1,172,228 40831510
Hanson Trust PLC Ord. 190,000 787,128 41135210
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
UNITED KINGDOM - CONTINUED
Hartstone Group PLC Ord. (b) 829,200 $ 578,823 41722610
Imperial Chemical Industries PLC:
ADR (New) 15,000 746,250 45270450
Ord. 50,000 622,934 45270440
Ladbroke Group PLC Ord. 570,000 1,604,527 50572799
Royale Insurance Co. Ltd. 350,000 1,396,860 78074910
Sedgwick Group 240,000 717,475 81482610
Shanks & McEwan Group PLC 1,400,000 2,273,222 81999294
Trafalgar House PLC Ord. 925,000 1,473,876 89270710
Wates City of London Property (b) 1,574,999 1,912,049 94299092
Wellcome PLC sponsored ADR 90,000 720,000 94947820
16,683,328
UNITED STATES OF AMERICA - 13.9%
AMR Corp. (b) 25,000 1,515,625 00176510
Allstate Corp. 56,700 1,353,713 02000210
Alumax, Inc. (b) 13,300 317,538 02219710
Amerada Hess Corp. 42,700 2,145,675 02355110
American Eagle Outfitters, Inc. 1,000 15,625 02553D10
American Ecology Corp. 25,400 266,700 02553310
American Stores Co. 68,800 1,720,000 03009610
Astec Industries, Inc. (b) 67,000 1,005,000 04622410
BJ Services Co. (b) 19,300 354,638 05548210
Baker (J.), Inc. 51,000 1,083,750 05723210
Bank of Boston Corp. 32,551 838,188 06071610
Bruno's, Inc. 150,000 1,143,750 11688110
Burlington Industries, Inc. 41,000 625,250 12169310
Cliffs Drilling Co. (b) 18,000 229,500 18682C10
Cobra Industries, Inc. (b) 71,000 426,000 19104E10
Cyprus Amax Minerals Co. 13,300 374,063 23280910
Dayton Hudson Corp. 32,900 2,599,100 23975310
Deposit Guaranty Corp. 25,000 706,250 24955510
Dresser Industries, Inc. 48,000 1,092,000 26159710
Eastman Kodak Co. 42,000 1,743,000 27746110
Enterra Corp. (b) 25,600 515,200 29380510
Exxon Corp. 15,000 943,125 30229010
GEON Co. 28,000 773,500 37246W10
Georgia Gulf Corp. (b) 23,800 687,225 37320020
Global Marine, Inc. (New) (b) 285,000 1,140,000 37935240
Global Ocean Carriers Ltd. (b) 26,200 88,425 37935710
Grace (W.R.) & Co. 10,900 444,175 38388310
Great Atlantic & Pacific Tea Co., Inc. 13,300 332,500 39006410
Halliburton Co. 14,000 414,750 40621610
Harveys Casino Resorts 24,500 410,375 41782610
Helmerich & Payne, Inc. 32,000 836,000 42345210
International Business Machines Corp. 63,700 3,646,825 45920010
Kentucky Electric Steel, Inc. (b) 28,600 293,150 49127B10
Kerr-McGee Corp. 54,600 2,443,350 49238610
Kroger Co. (The) (b) 70,000 1,592,500 50104410
Lafarge Corp. 36,200 819,025 50586210
Liz Claiborne, Inc. 90,000 2,250,000 53932010
Medusa Corp. 47,400 1,179,075 58507230
Mellon Bank Corp. 21,589 1,203,587 58550910
Micropolis Corp. (b) 54,050 391,863 59490710
Mobil Corp. 8,000 626,000 60705910
OM Group, Inc. (b) 70,000 1,400,000 67087210
Oryx Energy Co. 22,200 374,625 68763F10
Pfizer, Inc. 31,000 1,829,000 71708110
Philip Morris Companies, Inc. 26,000 1,417,000 71815410
RJR Nabisco Holdings Corp. (b) 228,700 1,457,963 74960K10
Reynolds Metals Co. 28,200 1,184,400 76176310
Rite Aid Corporation 55,000 1,058,750 76775410
Ross Stores, Inc. (b) 62,900 1,061,438 77829610
SHARES VALUE (NOTE 1)
Santa Fe Pacific Corp. 44,000 $ 979,000 80218310
Schering-Plough Corp. 39,000 2,379,000 80660510
Sears, Roebuck & Co. 33,000 1,551,000 81238710
Serv-Tech, Inc. (b) 18,200 177,450 81753910
Shawmut National Corp. 55,000 1,230,625 82048410
Standard Pacific Corp. 65,000 593,125 85375C10
Stop & Shop Companies, Inc. (b) 27,700 740,975 86209910
Supervalu, Inc. 17,000 554,625 86853610
Tech Data Corp. (b) 20,000 357,500 87823710
Texaco, Inc. 10,300 663,063 88169410
Textron, Inc. 19,000 1,002,250 88320310
Tidewater, Inc. 17,000 357,000 88642310
Tuboscope Vetco Corp. (b) 151,000 868,250 89860010
UAL Corp. (b) 8,000 1,033,000 90254910
UDC Homes, Inc. 60,200 413,875 90264610
Union Planters Corp. 62,407 1,653,786 90806810
Unisys Corp. (b) 70,000 761,250 90921410
United States Banknote Corp. (b) 125,000 437,500 91162310
Vons Companies, Inc. (b) 39,300 717,225 92886910
Weatherford International, Inc. (b) 42,500 456,875 94707610
Western Co. of North America (b) 55,000 701,250 95804340
Westpoint Stevens, Inc. Class A (b) 60,400 973,950 96123810
Whitney Holding Corp. 27,000 621,000 96661210
Wolverine Tube, Inc. (b) 36,000 828,000 97809310
70,420,765
VENEZUELA - 0.1%
CA Venepal GDR Class A ADR (b) (c) 134,502 437,132 12477610
TOTAL COMMON STOCKS
(Cost $350,845,237) 383,615,845
PREFERRED STOCKS - 4.3%
CONVERTIBLE PREFERRED STOCKS - 0.9%
UNITED KINGDOM - 0.1%
Trafalgar House PLC Ord. 6% 200,000 411,242 89270797
UNITED STATES OF AMERICA - 0.8%
Chiles Offshore Corp. $1.50 (b) 13,000 295,750 16888720
Consolidated Freightways, Inc., Series C,
$1.54 67,300 1,514,250 20923720
Kaiser Aluminum Corp. $0.96 (b) 19,000 178,125 48300740
Reynolds Metals Co. $3.31 21,500 991,688 76176350
Unisys Corp., Series A, $3.75 (b) 26,600 1,060,675 90921420
4,040,488
TOTAL CONVERTIBLE PREFERRED STOCKS 4,451,730
NONCONVERTIBLE PREFERRED STOCKS - 3.4%
GERMANY - 3.4%
Bayerische Motor Werke (BMW) AG 4,000 1,596,131 05528393
Escada AG (non-vtg.) 22,000 5,160,822 29605192
FAG Kugelfischer Georg Schaef 16,000 2,282,950 50105492
Herlitz AG 15,000 3,400,846 42799393
Kaufhof AG 5,800 1,465,780 48615294
Moebel Walther AG 3,600 1,469,166 61099B22
Schwabengarage AG 7,900 1,838,875 80899392
17,214,570
PREFERRED STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONCONVERTIBLE PREFERRED STOCKS - CONTINUED
PORTUGAL - 0.0%
Engil Soc. de Const. 10,000 $ 128,122 29299194
Engil Soc. de Const. (New) 6,000 76,873 29299198
204,995
TOTAL NONCONVERTIBLE PREFERRED STOCKS 17,419,565
TOTAL PREFERRED STOCKS
(Cost $18,001,868) 21,871,295
CORPORATE BONDS - 1.1%
MOODY'S RATINGS PRINCIPAL
AMOUNT (A)
CONVERTIBLE BONDS - 1.0%
DENMARK - 0.1%
Burmeister & Wain Holdings
AS 7%, 10/4/98 - DKK 3,160,000 726,577 122992AA
GERMANY - 0.1%
Commerzbank AG 7%,
12/31/00 - DEM 500,000 471,584 202990MS
GRAND CAYMAN - 0.5%
Filinvest (Cayman Island) Ltd.
3 3/4%, 2/28/04 (c) - $ 3,000,000 2,640,000 317015AA
SPAIN - 0.1%
Banco Santander euro 9%,
6/24/94 A1 ESP 50,000,000 393,685 0595749B
UNITED KINGDOM - 0.1%
Royal Insurance Holdings PLC
euro 7 1/4%, 12/12/07 - GBP 375,000 598,938 7807499B
TOTAL CONVERTIBLE BONDS 4,830,784
NONCONVERTIBLE BONDS - 0.1%
ITALY - 0.1%
Consorzio di Credit Oper.
Pubbl. 6%, 3/31/99 - ITL 1,300,000 758,328 210999AA
TOTAL CORPORATE BONDS
(Cost $5,722,555) 5,589,112
GOVERNMENT OBLIGATIONS (E) - 2.7%
ARGENTINA - 1.6%
Argentina Republic 5%,
3/31/05 (c) (d) - 187,000 136,276 039995AT
Argentina Republic:
BOCON 3 1/4%, 4/1/01 B1 1,472,024 1,029,843 039995AF
Brady:
euro 4%, 3/31/23 B1 10,000,000 5,287,500
4%, 3/31/23 (c) - 3,315,000 1,752,806 0401149Y
8,206,425
MEXICO - 0.9%
Mexican Government 10 3/5%,
10/20/94 - MXN 15,000,000 4,593,768 597998TH
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
SWEDEN - 0.2%
Swedish Government 11 1/2%,
9/1/95 Aa2 SEK 6,000,000 $ 822,409 8702009B
TOTAL GOVERNMENT OBLIGATIONS
(Cost $13,522,127) 13,622,602
REPURCHASE AGREEMENTS - 16.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 81,773,252 81,749,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $469,840,787) $ 506,447,854
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
197,712,500 ESP 5/3/94 $ 1,467,930 $ 74,607
(Payable amount $1,393,323)
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 0.3%
CONTRACTS TO SELL
197,712,500 ESP 5/3/94 $ 1,467,930 $ (79,524)
33,265,250 NOK 6/28/94 4,633,753 (77,806)
638,700,000 JPY 7/1/94 6,312,574 (111,964)
TOTAL CONTRACTS TO SELL
(Receivable amount $12,144,963) $ 12,414,257 $ (269,294)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 2.5%
CURRENCY ABBREVIATIONS
DKK - Danish krone
DEM - German Deutsche mark
ESP - Spanish peseta
GBP - British pound
ITL - Italian lira
JPY - Japanese yen
MXN - Mexican peso
NOK - Norwegian krone
SEK - Swedish krona
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $14,122,126 or 2.8% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR,
the fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
6. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $243,065,530 and $91,607,208, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $21,940 for the period (see Note 4 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $469,903,144. Net unrealized appreciation aggregated
$36,544,710, of which $59,459,988 related to appreciated investment
securities and $22,915,278 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.9%
Basic Industries 10.2
Conglomerates 0.4
Construction & Real Estate 12.5
Durables 8.5
Energy 3.7
Finance 18.9
Government Obligations 2.7
Health 1.5
Industrial Machinery & Equipment 3.0
Media & Leisure 3.1
Nondurables 1.5
Precious Metals 0.4
Repurchase Agreements 16.1
Retail & Wholesale 8.6
Services 1.5
Technology 3.1
Transportation 2.1
Utilities 0.3
100.0%
WORLDWIDE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S>
<C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of
$81,749,000) (cost $469,840,787)$ 506,447,854
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value
(cost $1,393,323) (Note 2)
1,467,930
Short foreign currency contracts
$ (12,414,257
(Note 2) )
Contracts held, at value
Receivable for contracts held
12,144,963 (269,294
)
Receivable for investments sold
8,042,635
Receivable for fund shares sold
17,009,053
Dividends receivable
893,189
Interest receivable
422,471
Other receivables
7,487
TOTAL ASSETS
534,021,325
LIABILITIES
Payable for foreign currency contracts held (Note 2)
1,393,323
Payable for investments purchased
623,007
Payable for fund shares redeemed
4,344,385
Accrued management fee
314,869
Other payables and accrued expenses
390,309
TOTAL LIABILITIES
7,065,893
NET ASSETS
$ 526,955,432
Net Assets consist of (Note 1):
Paid in capital
$ 468,911,677
Undistributed net investment income
1,291,214
Accumulated undistributed net realized gain (loss) on investments
20,340,161
Net unrealized appreciation (depreciation) on:
Investment securities
36,607,067
Foreign currency contracts
(194,687
)
NET ASSETS, for 38,489,069 shares outstanding
$ 526,955,432
NET ASSET VALUE, offering price and redemption price per share
($526,955,432 (divided by) 38,489,069 shares) (Note 4)
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 2,883,315
Dividends
Interest 1,919,073
4,802,388
Less foreign taxes withheld (Note 1) (253,778
)
TOTAL INCOME 4,548,610
EXPENSES
Management fee (Note 4) $ 1,606,216
Transfer agent fees (Note 4) 826,968
Accounting fees and expenses 125,451
(Note 4)
Non-interested trustees' compensation 1,140
Custodian fees and expenses 179,574
Registration fees 87,934
Audit 25,002
Legal 2,179
Miscellaneous 1,544
Total expenses 2,856,008
Expense reductions (Note 6) (2,558 2,853,450
)
NET INVESTMENT INCOME 1,695,160
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 20,810,808
Foreign currency contracts (146,783 20,664,025
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 9,592,747
Foreign currency contracts (373,435 9,219,312
)
NET GAIN (LOSS) 29,883,337
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 31,578,497
OTHER INFORMATION
Accounting fees paid to FSC $124,430
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations $ 1,695,160 $ 2,970,026
Net investment income
Net realized gain (loss) on investments 20,664,025 10,114,657
Change in net unrealized appreciation (depreciation) on investments 9,219,312 31,061,709
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 31,578,497 44,146,392
Distributions to shareholders: (2,354,690 (2,497,555
From net investment income )
)
From net realized gain (3,532,260 (158,811
) )
TOTAL DISTRIBUTIONS (5,886,950 (2,656,366
) )
Share transactions 490,802,662 277,973,551
Net proceeds from sales of shares
Reinvestment of distributions 5,746,754 2,587,340
Cost of shares redeemed (282,563,692 (138,399,750
) )
Net increase (decrease) in net assets resulting from share transactions 213,985,724 142,161,141
TOTAL INCREASE (DECREASE) IN NET ASSETS 239,677,271 183,651,167
NET ASSETS
Beginning of period 287,278,161 103,626,994
End of period (including undistributed net
investment income of $1,291,214 and $3,525,845, respectively) $ 526,955,432 $ 287,278,161
OTHER INFORMATION
Shares
Sold 36,618,695 23,493,059
Issued in reinvestment of distributions 451,410 270,077
Redeemed (21,102,260 (11,997,236
) )
Net increase (decrease) 15,967,845 11,765,900
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, MAY 30, 1990
APRIL 30, 1994 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
OCTOBER 31, 1990
SELECTED PER-SHARE DATA
1993 1992 1991
Net asset value, beginning of period
$ 12.76 $ 9.63 $ 9.61 $ 8.95 $ 10.00
Income from Investment Operations
Net investment income
.01 .11 .20 .21 .05
Net realized and unrealized gain (loss) on investments
1.17 3.28 (.08) .53 (1.10)
Total from investment operations
1.18 3.39 .12 .74 (1.05)
Less Distributions
From net investment income
(.10) (.24) (.10) (.08) -
From net realized gain
(.15) (.02)(s diamond) - - -
Total distributions
(.25) (.26) (.10) (.08) -
Net asset value, end of period
$ 13.69 $ 12.76 $ 9.63 $ 9.61 $ 8.95
TOTAL RETURN (diamond)
9.40% 36.10% 1.32% 8.33% (10.50)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 526,955 $ 287,278 $ 103,627 $ 105,029 $ 94,851
Ratio of expenses to average net assets
1.40%* 1.40% 1.51% 1.69% 2.00%*
Ratio of expenses to average net assets before expense
1.40%* 1.40% 1.51% 1.69% 2.46%*
reductions
Ratio of net investment income to average net assets
.83%* 1.99% 2.02% 2.19% 2.09%*
Portfolio turnover rate
58%* 57% 130% 129% 123%*
* ANNUALIZED
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED
TRANSACTIONS TAXABLE AS ORDINARY INCOME.
(diamond) THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED
DURING THE PERIODS SHOWN.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN
ONE YEAR ARE NOT ANNUALIZED.
</TABLE>
CANADA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Canada Fund has
a 3% sales charge, which has been waived through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTH YEAR YEARS FUND
S
CANADA -2.25% 4.87% 51.69% 111.61%
CANADA
(INCL. 3% SALES CHARGE) -5.18% 1.73% 47.14% 105.26%
TSE 300 (Toronto Stock
Exchange 300) Index -3.10% 6.21% 19.24% 71.07%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on November 17, 1987. You can compare the fund's
figures to the performance of the Toronto Stock Exchange (TSE) 300 index -
a broad measure of the performance of the Canadian stock market. This index
includes reinvested dividends and capital gains, if any, and excludes the
effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
CANADA 4.87% 8.69% 12.31%
CANADA
(INCL. 3% SALES CHARGE) 1.73% 8.03% 11.78%
TSE 300 (Toronto Stock
Exchange 300) Index 6.21% 3.58% 8.67%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Canada (309) Toronto 300 Stock Exc.
11/17/87 9700.00 10000.00
11/30/87 9767.90 10153.53
12/31/87 10446.90 10895.36
01/31/88 10340.20 10759.36
02/29/88 11048.30 11447.90
03/31/88 11737.00 12111.13
04/30/88 12008.60 12268.35
05/31/88 11436.30 11947.11
06/30/88 12319.00 12906.84
07/31/88 12144.40 12762.32
08/31/88 11562.40 12139.94
09/30/88 11804.90 12401.15
10/31/88 12357.80 12753.48
11/30/88 12212.30 12830.11
12/31/88 12480.81 13188.28
01/31/89 13422.57 14213.27
02/28/89 13045.86 13881.50
03/31/89 13263.96 14027.96
04/30/89 13531.61 14346.43
05/31/89 13987.62 14383.31
06/30/89 14661.73 14845.75
07/31/89 15553.92 15890.01
08/31/89 15633.23 16147.42
09/30/89 15534.09 15922.92
10/31/89 15316.00 15949.98
11/30/89 15405.22 16197.04
12/31/89 15849.09 16474.68
01/31/90 14563.75 15023.40
02/28/90 14646.68 14920.74
03/31/90 14895.45 15084.12
04/30/90 14180.22 13930.65
05/31/90 15113.13 14884.87
06/30/90 15465.56 14908.13
07/31/90 15589.95 15161.03
08/31/90 14688.14 14235.18
09/30/90 14449.73 13514.44
10/31/90 14066.20 13073.85
11/30/90 14522.29 13439.96
12/31/90 14978.59 14019.82
01/31/91 15045.01 14077.13
02/28/91 16428.84 15100.37
03/31/91 17148.44 15213.01
04/30/91 17281.28 15194.26
05/31/91 18045.16 15713.88
06/30/91 18067.30 15474.06
07/31/91 18011.95 15696.55
08/31/91 17856.96 15774.78
09/30/91 17259.14 15380.42
10/31/91 18023.02 16117.15
11/30/91 17347.71 15691.20
12/31/91 17627.42 15764.11
01/31/92 17945.13 15903.64
02/29/92 18051.04 15778.39
03/31/92 17545.04 15003.00
04/30/92 17333.23 14750.06
05/31/92 17486.21 14781.51
06/30/92 17392.07 14899.21
07/31/92 17839.23 15353.94
08/31/92 17568.58 15073.09
09/30/92 16815.47 14065.44
10/31/92 16744.87 14331.45
11/30/92 16697.80 13610.56
12/31/92 17121.47 14127.27
01/31/93 17027.20 13986.24
02/28/93 18087.72 14844.82
03/31/93 19077.54 15446.95
04/30/93 19572.44 16106.36
05/31/93 19843.46 16559.37
06/30/93 20856.85 16822.63
07/31/93 20102.70 16806.78
08/31/93 20609.39 17107.05
09/30/93 19596.01 16373.43
10/31/93 20998.25 17654.85
11/30/93 20515.13 17182.05
12/31/93 21482.46 18005.65
01/31/94 22427.27 18880.15
02/28/94 21470.65 18093.83
03/31/94 20679.38 17332.87
04/30/94 20525.85 17106.99
Let's say you invested $10,000 in Fidelity Canada Fund on its start date
and paid the 3% sales charge. By April 30, 1994, it would have grown to
$20,526 - a 105.26% increase on your initial investment. That compares to
$10,000 invested in the Toronto Stock Exchange (TSE) 300 index, which would
have grown to $17,107 over the same period - a 71.07% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
CANADA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with George Domolky,
Portfolio Manager of Fidelity Canada Fund
Q. HOW DID THE FUND PERFORM, GEORGE?
A. The fund suffered a loss of -2.25% for the six months ended April 30,
1994. But it did outperform the Toronto Stock Exchange 300 index, which
posted a bigger loss of -3.10%. For the 12 months ended April 30, the fund
underperformed the index. The fund rose 4.87%, while the index was up
6.21%.
Q. WHAT ACCOUNTED FOR THE CANADIAN MARKET'S DECLINE?
A. The past six months saw considerable fluctuations in the Canadian
market. It did very well until the end of January, based on investors'
hopes for an economic recovery. However, Canadian interest rates started to
climb in February after the Federal Reserve's actions caused U.S. interest
rates to rise. That had a negative effect on the stock market in Canada,
where the economic recovery was just beginning to get off the ground.
Q. WHAT WAS THE FUND'S STRATEGY DURING THE PERIOD?
A. I continued to favor industries that would benefit from a stronger
economy in North American as well as a global economic recovery. Those
sectors performed well early in the period and declined less than others
when stock prices declined in Canada. I also favored export-oriented
companies. They benefited from the weak Canadian dollar, which makes their
products cheaper to foreign buyers.
Q. WHICH SECTORS WERE YOUR FAVORITES?
A. One group I continued to hold was the energy sector. Canada's unique
position as a supplier of natural gas to the U.S. should continue to
benefit the fund's major holdings such as Renaissance Energy, Morrison
Petroleums and Tarragon Oil & Gas. These are companies that are
well-endowed with natural gas reserves, which are in demand as a cleaner
alternative to coal and nuclear energy. I also invested a considerable
stake in stocks of companies that produce base metals such as nickel,
aluminum and zinc. I believe their prices are expected to pick up as the
economic recovery in North America and Europe boosts industrial production.
The fund's largest positions included metals company Noranda. The fund also
held shares of Alcan Aluminum, and Cominco Co., which is involved in zinc
production. In addition, I think chemical companies will benefit from
stronger demand worldwide. That's why the fund owned shares of companies
such as NOVA Corp., Cominco Fertilizer and Dupont Canada.
Q. YOU CONTINUED TO INVEST A SIGNIFICANT STAKE IN THE FOREST PRODUCTS
INDUSTRY AS WELL. DO YOU THINK THOSE FIRMS BENEFIT FROM A GLOBAL ECONOMIC
RECOVERY?
A. Yes. Prices should rise for commodity products such as newsprint and
market pulp, which is a base material used in the paper-making process.
That will be good for commodity-oriented forest companies such as Abitibi,
a newsprint maker, and Noranda Forest. In addition, I believe that the
chronic lumber shortage in the Western world will support lumber prices.
That will continue to help companies such as Riverside Forest Products,
Domain Industries and International Forest Products.
Q. WHAT WERE THE FUND'S DISAPPOINTMENTS DURING THE PERIOD?
A. The groups which have not performed well during the past six months
include retailers such as Hudson's Bay and Sears Canada. The entry of U.S.
discount retailer Walmart into the Canadian market created a great deal of
concern about the earnings outlook for those companies, because their
competitive environment is expected to tighten significantly. That hurt the
stock prices.
Q. WHY DOES THE FUND HAVE SUCH A LARGE STAKE IN MEDIA
COMPANIES?
A. I believe that advertising revenues will grow as the Canadian economy
picks up steam, and that will help newspaper and other publishing firms. In
addition, cable and cellular companies still provide unique technologies
that will continue to be in demand. The fund's holdings included stocks of
firms such as Torstar, which publishes the Toronto STAR, and Rogers
Communications, a diversified media company listed under utilities.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DO YOU USE THEM?
A. The fund has the authority to use derivatives, but outside of currency
contracts I use to settle trades, I haven't made much use of them.
Q. WHAT'S THE OUTLOOK FOR THE CANADIAN MARKET AND THE FUND?
A. I believe the Canadian economic recovery should strengthen by the end of
this year, which I think could help support stock prices. Moreover,
Canadian stocks don't look particularly expensive, so there could be room
for some gains. The Toronto Stock Exchange 300 index, which represents the
Canadian stock market, is about at the same level as it was in 1987.
Finally, as the North American and global economic recovery continues,
Canada as a provider of base natural resources should benefit from higher
demand and better prices for Canadian products such as forest products,
base metals and natural gas. I would caution, however, that the upcoming
provincial elections in Quebec this fall will raise again the much-debated
issue of Quebec's status in the Canadian Commonwealth, which could make
some investors nervous and might not help stock prices.
FUND FACTS
GOAL: to increase the value of the fund's shares
by investing mainly in Canadian common stocks
and convertible securities
START DATE: November 17, 1987
SIZE: as of April 30, 1994, more than $172 million
MANAGER: George Domolky, since November
17, 1987; manager, Fidelity Select Food &
Agriculture Portfolio, 1985-87; assistant, Fidelity
Magellan Fund, 1983-86; joined Fidelity in 1981
(checkmark)
GEORGE DOMOLKY ON THE FUND'S STRATEGY:
"I am not an economist or a market forecaster. I am a
stock picker. That means I spend most of my energy
trying to find companies with strong finances and
good markets that can generate good cash flow and
profits over time. You don't always find those
companies by scanning financial reports. Instead,
you have to go and visit them, which is something I
do several times a month. Once I decide that a
company is solid, I consider whether the price of the
stock is attractive right now. I figure that if I buy it
cheaply enough, it will eventually rise to reflect the
value of the firm's assets and earnings potential.
Canadian stocks are not always followed as closely
as their American counterparts. That means I may
be able to find something that has been overlooked
by other investors.
"Recently, I have been investing a significant portion
of the fund's investments in stocks that I think will
benefit from stronger economic growth around the
world. Canada includes many companies that are
well-positioned to benefit from rising demand for
natural resource-based products such as timber and
natural gas. But the key to my strategy is not to
predict when that economic growth will occur.
Instead, it is finding the right companies within the
Canadian economy and buying their stocks when
they are attractively priced. "
(bullet) 24.4% of the fund's investments were
concentrated in energy, metals and mining (7.1%)
and media and leisure (8.4%).
(bullet) Many of the fund's holdings could benefit from a
stronger Canadian economy as well as increased
worldwide demand for natural resource products.
(bullet) The fund's holdings of retail and wholesale stocks
amounted to only 5.2% of its investments as of April
30. Fears of increased competition from U.S.
discounter Walmart, which entered the Canadian
market, may have dimmed prospects for those
stocks.
CANADA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 5.8%
Row: 1, Col: 1, Value: 5.8
Row: 1, Col: 2, Value: 94.2
Canada 94.2%
AS OF OCTOBER 31, 1993
United States 8.2%
Row: 1, Col: 1, Value: 8.199999999999999
Row: 1, Col: 2, Value: 91.8
Canada 91.8%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 96.6 94.3
Bonds 1.8 0.9
Short-term investments 1.6 4.8
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Canadian Pacific Ltd. Ord.
(Railroads) 3.1 -
Noranda, Inc.
(Metals & Mining) 3.1 3.9
Morrison Petroleums Ltd.
(Oil & Gas) 2.7 2.0
Brascan Ltd. Ord. Class A
(Conglomerates) 2.3 -
Exco Technologies Ltd.
(Industrial Machinery & Equipment) 2.3 3.0
Renaissance Energy Ltd.
(Oil & Gas) 2.0 3.6
NOVA Corp. of Alberta Class A
(Chemicals & Plastics) 1.9 -
Alcan Aluminum Ltd.
(Metals & Mining) 1.8 -
Torstar Corp. Class B
(Publishing) 1.8 2.8
Four Seasons Hotel, Inc.
(Lodging & Gaming) 1.8 0.7
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Energy 24.4 23.9
Basic Industries 21.3 18.9
Media & Leisure 8.4 10.3
Industrial Machinery & Equipment 6.9 8.0
Precious Metals 6.4 10.0
Retail & Wholesale 5.2 4.6
Transporation 3.7 -
Durables 3.5 2.6
Utilities 3.1 4.4
Nondurables 3.1 2.4
CANADA
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 96.5%
SHARES VALUE (NOTE 1)
BASIC INDUSTRIES - 20.7%
CHEMICALS & PLASTICS - 5.6%
AT Plastics, Inc. 50,000 $ 302,849 00194710
Cominco Fertilizer Ltd. 50,000 940,189 20043C10
Dupont Canada Class A, Series 1 8,900 334,707 26590210
Intertape Polymer Group, Inc. 52,000 808,563 46091910
Maax, Inc. (b) 278,300 2,641,707 57777C10
Maax, Inc. (warrants) (b) 8,333 40,680 57777C11
NOVA Corp. of Alberta Class A 424,900 3,265,034 66977110
Tarxien Corp. 70,000 784,696 87651E20
Winpak Ltd. 30,000 515,296 97535P10
9,633,721
IRON & STEEL - 0.9%
Co-Steel, Inc. (sub.-vtg.) (b) 31,200 609,243 18975N10
Linamar Corp. 30,000 496,312 53278L10
Samuel Manu-Tech, Inc. 25,000 433,933 79606J10
Shaw Industries Ltd. Class A 6,300 54,676 82090420
1,594,164
METALS & MINING - 7.1%
Alcan Aluminium Ltd. 150,210 3,150,423 01371610
American Gem Corp. 30,000 107,398 0263E108
Cameco, Inc. 30,000 507,160 13321L10
Cominco Ltd. 123,200 1,882,259 20043510
Dia Met Minerals Ltd. (b) 28,000 559,413 25243K10
Kookaburra Resources Ltd. 150,000 234,324 50050D10
Noranda, Inc. 307,944 5,372,930 65542210
Southernera Resources Ltd. (b) 57,000 273,107 84390110
12,087,014
PAPER & FOREST PRODUCTS - 7.1%
Abitibi-Price, Inc. 175,900 2,083,143 00368010
Abitibi-Price, Inc. installment receipts (d) 9,200 49,071 00368070
Ainsworth Lumber Ltd. (b) 50,000 555,977 00891410
Avenor, Inc. 48,000 733,348 05356K10
Canfor Corp. 18,000 572,792 13790210
Domain Industries Ltd. Class B (non-vtg.),
Series 2 40,000 437,550 25703930
Donohue, Inc. Class B (b) 41,600 394,880 25804110
Fletcher Challenge Ltd.:
Class A 91,639 1,292,370 33932D10
Receipts 10,000 83,171 33932D20
International Forest Products Class A (b) 50,000 587,618 45953E10
Longview Fibre Co. 10,000 176,250 54321310
Merfin Hygenic Products Ltd. (b) 543,700 1,612,185 58950K10
Noranda Forest, Inc. (b) 177,000 1,664,135 65542L10
Norwall Group, Inc. 40,000 336,298 66920H10
Pacific Forest Products Ltd. 10,000 115,716 69428P10
Riverside Forest Products 56,100 1,024,463 76890410
Slocan Forest Products Ltd. 18,900 377,604 83158C10
12,096,571
TOTAL BASIC INDUSTRIES 35,411,470
CONGLOMERATES - 3.0%
Brascan Ltd. Class A 310,000 3,951,508 10550240
Federal Industries Ltd. Class A cv (b) 49,800 270,124 31345330
Suncor, Inc. 40,000 904,028 86722910
5,125,660
CONSTRUCTION & REAL ESTATE - 1.8%
BUILDING MATERIALS - 0.2%
Global Stone (b) 100,000 357,995 37936Q10
CONSTRUCTION - 0.6%
Firan Corp. (special warrants) (b)(c) 150,000 458,668 31809192
Royal Lepage Ltd. (b) 100,000 289,289 78033W10
Viceroy Homes Ltd. Class A 109,100 335,341 92562710
1,083,298
SHARES VALUE (NOTE 1)
ENGINEERING - 0.1%
Agra Industries Ltd. Class B (b) 20,000 $ 106,675 00848940
REAL ESTATE - 0.9%
Cambridge Shopping Centres Ltd. 105,900 1,225,428 13250910
Markborough Properties, Inc. 200,000 390,540 57052F10
1,615,968
TOTAL CONSTRUCTION & REAL ESTATE 3,163,936
DURABLES - 3.5%
AUTOS, TIRES, & ACCESSORIES - 1.8%
Hayes-Dana, Inc. 11,300 131,780 42077610
Meridian Technologies, Inc. (b) 214,600 1,493,835 58978510
Stackpole Ltd. (b) 105,000 968,214 85232N10
UAP, Inc. Class A 30,100 481,639 90255810
3,075,468
CONSUMER DURABLES - 0.4%
Unican Security Systems Ltd. Class B 45,000 691,582 90458940
HOME FURNISHINGS - 1.3%
Dorel Industries:
Class A (vtg.) (c) 105,000 816,337 25822C30
Class B (sub.-vtg.) (b)(c) 82,000 652,347 25822C20
Leons Furniture Ltd. 80,000 694,294 52668210
2,162,978
TOTAL DURABLES 5,930,028
ENERGY - 24.4%
ENERGY SERVICES - 1.8%
Akita Drilling Ltd. Class A (non-vtg.) (b) 60,700 175,598 00990510
Dreco Energy Services Ltd. Class A (b) 5,700 52,725 26152820
Enserv Corp. (b) 84,700 888,226 29357B10
Nowsco Well Service Ltd. 77,000 1,280,827 67012210
Precision Drilling Class A (b) 53,900 638,325 74022D10
3,035,701
OIL & GAS - 22.6%
Anderson Exploration Ltd. (b) 5,400 133,272 03390110
Archer Resources Ltd. (b) 59,700 825,748 03950K10
Ballistic Energy Corp. 20,000 108,483 05865K10
Battle Creek Developments Ltd. (b) 220,000 410,500 07134E10
Beau Canada Exploration 600,000 985,032 07428010
Canadian Natural Resources Ltd. (b) 67,900 1,012,828 13638510
Canadian Occidental Petroleum Ltd. 90,000 1,822,522 13642010
Chancellor Energy Resources (b) 380,000 769,508 15882910
Czar Resources Ltd. (b) 105,600 141,289 23282910
DEKALB Energy Corp. Class B (b) 79,500 1,113,000 24487410
Dorset Exploration Ltd. (b) 241,200 2,071,491 25842E10
Encal Energy Ltd. (b) 515,900 1,026,053 29250D10
Ensign Resource Service Group Ord. (b) 81,900 399,815 29357T10
Excel Energy, Inc. (warrants) (b) 25,000 3,616 30065492
Gardiner Oil & Gas, Ltd. (b) 104,400 575,721 36553R10
Grad & Walker Energy Corp. 54,400 580,314 38391010
Gulf Canada Corp. (b) 50,000 166,341 40218L30
HCO Energy Ltd. 70,000 106,314 40390410
Intensity Resources Ltd. (b) 342,900 709,261 45816E10
Inverness Petroleum Ltd. (b) 409,300 3,034,153 46190810
Jordan Petroleum Ltd. Class A (b) 3,000 21,154 48076110
Morgan Hydrocarbons, Inc. (b) 247,000 982,497 61790010
Morrison Petroleums Ltd. 566,500 4,660,403 61847310
Northridge Exploration Ltd. (b) 100,800 72,172 66667T10
Northstar Energy Corp. (b) 20,200 427,316 66703R10
Nugas Ltd. 30,000 101,974 67051K10
Pancanadian Petroleum Ltd. 24,200 774,463 69890020
Paramount Resources Ltd. (b) 86,800 1,263,362 69932010
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - CONTINUED
OIL & GAS - CONTINUED
Plastibec Ltd. (special warrants) (b) 60,000 $ 278,282 72753D92
Poco Petroleums Ltd. (b) 190,000 1,425,654 73036110
Remington Energy Ltd. 25,000 66,898 75958D10
Renaissance Energy Ltd. (b) 149,622 3,354,510 75966610
Richland Petroleum Corp. Class A 56,800 195,126 76390110
Rigel Energy Corp. (b) 73,000 1,062,505 76655L10
Rio Alto Exploration Ltd. (b) 93,300 598,855 76689210
Summit Resources Ltd. 85,600 588,125 86624610
Talisman Energy, Inc. (b) 105,000 2,420,536 87425E10
Tarragon Oil & Gas Ltd. (b) 257,000 3,020,359 87629E20
Tri Link Resources Ltd. Class A (b) 64,900 574,980 89557D10
Ulster Petroleums Ltd. (b) 50,000 159,109 90384010
Wascana Energy, Inc. 36,500 263,976 93690110
Winfield Energy Ltd. 160,000 543,864 97390510
38,851,381
TOTAL ENERGY 41,887,082
FINANCE - 2.9%
CREDIT & OTHER FINANCE - 0.9%
Power Corporation of Canada 55,000 835,322 73923910
Trimark Financial Corp. (b) 26,400 706,444 89621H10
1,541,766
INSURANCE - 0.3%
Crownx, Inc. Class A (b) 101,500 587,257 22870220
SECURITIES INDUSTRY - 1.7%
First Marathon, Inc. Class A (non-vtg.) 66,200 694,222 32076L20
Investors Group, Inc. 40,000 542,417 46152H10
Mackenzie Financial Corp. 151,000 1,051,114 55453110
Power Financial Corp. 20,000 482,751 73927C10
20/20 Financial Corp. 11,900 109,731 90136T10
2,880,235
TOTAL FINANCE 5,009,258
HEALTH - 0.6%
DRUGS & PHARMACEUTICALS - 0.4%
Allelix Biopharmaceuticals, Inc. 10,000 50,626 01749H10
Zenon Environmental, Inc. 78,200 551,421 98942B10
602,047
MEDICAL FACILITIES MANAGEMENT - 0.2%
Spectral Diagnostics, Inc. 10,000 263,976 84757410
TOTAL HEALTH 866,023
INDUSTRIAL MACHINERY & EQUIPMENT - 6.9%
ELECTRICAL EQUIPMENT - 0.1%
Noma Industries Ltd. Class A (b)(c) 26,200 111,322 65531630
INDUSTRIAL MACHINERY & EQUIPMENT - 6.8%
Champion Road Machinery Ltd. (c) 20,000 178,998 15864C92
Eagle Precision Tech. (b) 178,500 1,355,500 26990010
Enerflex Systems Ltd. 15,000 197,982 29265B10
Exco Technologies Ltd. (b) 572,800 3,935,491 30150P10
Finning Ltd. 118,300 1,946,428 31807140
Hawker Siddeley Canada, Inc.
(special warrants) (b) 35,700 570,291 42012892
Laperriere & Verreault, Inc. (b) 11,300 21,657 39945L20
Osmonics, Inc. 15,000 238,125 68835010
Trojan Technologies Corp. (b) 290,400 2,599,045 89692410
Valmont Industries, Inc. 48,700 754,850 92025310
11,798,367
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 11,909,689
SHARES VALUE (NOTE 1)
MEDIA & LEISURE - 8.4%
BROADCASTING - 0.8%
Chum Ltd. Class B (b) 7,000 $ 97,454 17132220
Cogeco, Inc. 40,000 339,915 19238T10
Shaw Cablesystems Ltd. Class B cv (b)(c) 44,000 815,434 82028K20
Videotron Group Ltd. 16,800 174,658 92558H10
1,427,461
ENTERTAINMENT - 1.2%
Astral Bellevue Pathe, Inc. Class A 122,000 1,510,993 04634620
Cinar Films, Inc. (b) 82,000 511,500 17190510
2,022,493
LODGING & GAMING - 1.8%
Four Seasons Hotels, Inc. 351,500 3,114,107 35100E10
PUBLISHING - 4.4%
Hollinger, Inc. (b) 30,000 339,010 43556C10
Southam, Inc. 135,100 1,856,440 84084010
Thomson Corp. 171,798 2,158,812 88490310
Toronto Sun Publishing Co. (b) 8,000 88,956 89199110
Torstar Corp. Class B 169,000 3,116,728 89147420
7,559,946
RESTAURANTS - 0.2%
Cara Operations Ltd. (b) 91,500 271,317 14075420
Spectra Group of Great Restaurants, Inc.
Class A (non-vtg.) 4,900 24,807 84756E20
296,124
TOTAL MEDIA & LEISURE 14,420,131
NONDURABLES - 3.1%
AGRICULTURE - 0.1%
Chai-Na-Ta Ginseng Products (b) 20,705 97,333 15745J10
DEKALB Genetics Corp. Class B 4,900 155,575 24487820
252,908
BEVERAGES - 0.3%
Coca Cola Beverages Canada 100,000 347,147 19108T10
Corby Distilleries Ltd. 6,000 160,555 21834310
507,702
FOODS - 2.7%
Ault Foods Ltd. 197,300 2,247,397 05150E10
Tootsie Roll Industries, Inc. 9,937 638,452 89051610
Weston George Ltd. 55,000 1,710,422 96114850
4,596,271
TOTAL NONDURABLES 5,356,881
PRECIOUS METALS - 6.2%
Aber Resources Ltd. 80,000 248,789 00291110
Agnico Eagle Mines Ltd. 66,000 721,957 00847410
American Barrick Resources Corp. 45,000 1,037,372 02451E10
Canaarc Resources Corp. 10,000 32,545 13722D10
Euro-Nevada Mining Corp. 43,000 1,166,197 29870P10
Franco Nevada Mining Corp. 35,600 1,834,454 35186010
Pegasus Gold, Inc. 50,000 818,145 70556K10
Placer Dome, Inc. 140,000 2,885,659 72590610
Prime Resources Group, Inc. (b) 50,300 327,403 74157L10
Rayrock Yellowknife Resources, Inc. (b) 46,200 639,021 75509N10
Teck Corp. Class B (sub.-vtg.) 50,000 858,827 87874220
Viceroy Resources Corp. (b) 10,000 74,130 92564C10
10,644,499
RETAIL & WHOLESALE - 5.2%
GENERAL MERCHANDISE STORES - 1.3%
Hudson's Bay Co. Ord. 46,000 952,303 44420410
Sears Canada, Inc. 200,000 1,175,236 81234D10
2,127,539
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
RETAIL & WHOLESALE - CONTINUED
GROCERY STORES - 3.7%
Empire Ltd. Class A 19,600 $ 228,575 29184340
Loblaw Companies Ltd. 70,100 1,204,075 53948110
Oshawa Group Ltd. Class A 45,000 703,786 68820520
Stop & Shop Companies, Inc. (b) 99,800 2,669,650 86209910
Van Houtte (A.L.) (b) 175,500 1,602,436 92090410
6,408,522
RETAIL & WHOLESALE, MISCELLANEOUS - 0.2%
Forzani Group Ltd. Class A 40,000 303,754 34990710
TOTAL RETAIL & WHOLESALE 8,839,815
SERVICES - 1.5%
PRINTING - 0.7%
GTC Transcontinental Group Class A 74,900 473,982 36229K20
MDC Corp. Class A (sub.-vtg.) (b) 150,000 297,792 55267W10
Moore Corporation Ltd. 20,000 363,419 61578510
1,135,193
SERVICES - 0.8%
Arbor Memorial Services, Inc. Class B
(non-vtg.) (b) 43,300 454,075 03891620
G&K Services, Inc. Class A 67,500 961,875 36126810
1,415,950
TOTAL SERVICES 2,551,143
TECHNOLOGY - 1.5%
COMMUNICATIONS EQUIPMENT - 0.5%
Northern Telecom Ltd. 10,000 297,425 66581510
SR Telecom, Inc. 44,100 430,571 78464P10
Telular Canada, Inc. 66,000 162,291 87970B10
890,287
COMPUTER SERVICES & SOFTWARE - 0.7%
EICON Technology Corp. (b) 45,000 423,085 28248F10
Electronic Retailing Systems (b) 34,500 310,500 28582510
ISG Technologies, Inc. (b) 5,000 42,500 45021P30
Telepanel Systems, Inc. 95,000 446,590 87943U20
1,222,675
ELECTRONIC INSTRUMENTS - 0.3%
Mosaid Technologies, Inc. 69,300 488,663 61945Q10
TOTAL TECHNOLOGY 2,601,625
TRANSPORTATION - 3.7%
AIR TRANSPORTATION - 0.6%
Air Canada, Inc. (b) 225,000 1,078,054 00891110
RAILROADS - 3.1%
Canadian Pacific Ltd. Ord. 334,000 5,374,628 13644030
TOTAL TRANSPORTATION 6,452,682
UTILITIES - 3.1%
CELLULAR - 3.1%
BCE Mobile Communications, Inc. 26,900 739,278 05534G10
Call-Net Enterprises, Inc. (b) 78,000 564,114 13091010
Call-Net Enterprises (non-vtg.) Class B (b) 78,000 542,960 13091020
Rogers Cantel Mobile Communications,
Inc. Class B (non-vtg.) (b) 20,000 493,599 77510210
Rogers Communications, Inc. Class B (b) 208,600 3,017,283 77510920
5,357,234
TOTAL COMMON STOCKS
(Cost $162,291,937) 165,527,156
CONVERTIBLE PREFERRED STOCKS - 0.1%
SHARES VALUE (NOTE 1)
ENERGY - 0.0%
OIL & GAS - 0.0%
Valero Energy Corp. $3.125 2,000 $ 100,250 91913840
PRECIOUS METALS - 0.1%
Battle Gold Co. 2,000 119,000 07159330
TOTAL CONVERTIBLE PREFERRED STOCKS
(Cost $200,000) 219,250
CORPORATE BONDS - 1.8%
MOODY'S PRINCIPAL VALUE (NOTE 1)
RATINGS (D) AMOUNT (A)
CONVERTIBLE BONDS - 1.7%
BASIC INDUSTRIES - 0.6%
PAPER & FOREST PRODUCTS - 0.6%
Abitibi-Price, Inc. 7.85%,
3/1/03 - CAD 1,000,000 914,877 003680AD
Avenor, Inc. 7 1/2%, 2/8/04 - CAD 147,000 129,171 05356KAA
1,044,048
CONSTRUCTION & REAL ESTATE - 1.1%
REAL ESTATE - 1.1%
Markborough Properties, Inc.
6%, 3/14/04 - CAD 2,700,000 1,816,012 57052FAA
TOTAL CONVERTIBLE BONDS 2,860,060
NONCONVERTIBLE BONDS - 0.1%
PRECIOUS METALS - 0.1%
Agnico Eagle Mines Ltd. yankee
3 1/2%, 1/27/04 B1 $ 220,000 173,800 008474AA
TOTAL CORPORATE BONDS
(Cost $3,164,689) 3,033,860
REPURCHASE AGREEMENTS - 1.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 2,743,814 2,743,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $168,399,626) $ 171,523,266
CURRENCY ABBREVIATIONS
CAD - Canadian dollar
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $3,033,106 or 1.8% of net
assets.
4. Market value reflects the payment of the first installment. Additional
equal payments of CAD 46,000 are payable in January and October of 1995.
5. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $115,703,067 and $31,649,352 respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $4,328 for the period (see Note 4 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $1,799,400 and $3,867,000, respectively. The
weighted average interest rate was 4.15%. Interest expense includes $1,037
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $168,969,425. Net unrealized appreciation aggregated
$2,553,841, of which $13,476,104 related to appreciated investment
securities and $10,922,263 related to depreciated investment securities.
CANADA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $2,743,000) (cost $168,399,626) (Notes $ 171,523,266
1 and 2) - See accompanying schedule
Cash 594
Receivable for investments sold 1,065,839
Receivable for fund shares sold 776,907
Dividends receivable 142,923
Interest receivable 29,113
Other receivables 36,832
TOTAL ASSETS 173,575,474
LIABILITIES
Payable for fund shares redeemed $ 484,691
Payable for investments purchased 712
Accrued management fee 110,474
Other payables and accrued expenses 149,669
TOTAL LIABILITIES 745,546
NET ASSETS $ 172,829,928
Net Assets consist of (Note 1):
Paid in capital $ 171,814,078
Accumulated net investment (loss) (336,797
)
Accumulated undistributed net realized gain (loss) on investments (1,770,993
)
Net unrealized appreciation (depreciation) on investment securities 3,123,640
NET ASSETS, for 9,943,673 shares outstanding $ 172,829,928
NET ASSET VALUE, offering price and redemption price per share ($172,829,928 (divided by) 9,943,673 shares)(Note 4) $17.38
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 845,922
Dividends
Interest 180,908
1,026,830
Less foreign taxes withheld (Note 1) (123,466
)
TOTAL INCOME 903,364
EXPENSES
Management fee (Note 4) $ 553,812
Basic fee
Performance adjustment 39,161
Transfer agent fees (Note 4) 540,228
Accounting fees and expenses 43,938
(Note 4)
Non-interested trustees' compensation 402
Custodian fees and expenses 19,938
Registration fees 25,265
Audit 14,666
Legal 833
Interest (Note 5) 1,037
Miscellaneous 758
TOTAL EXPENSES 1,240,038
NET INVESTMENT INCOME (LOSS) (336,674
)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) (1,128,584
Net realized gain (loss) on investment securities )
Change in net unrealized appreciation (depreciation) on investment securities (7,374,818
)
NET GAIN (LOSS) (8,503,402
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (8,840,076
)
OTHER INFORMATION
Deferred sales charges withheld by $3,432
FDC (Note 4)
Accounting fees paid to FSC $43,756
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations $ (336,674 $ (406,210
Net investment income (loss) ) )
Net realized gain (loss) on investments (1,128,584 (215,792
) )
Change in net unrealized appreciation (depreciation) on investments (7,374,818 9,798,514
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (8,840,076 9,176,512
)
Distributions to shareholders - (30,615
From net investment income )
In excess of net realized gain (242,990 -
)
TOTAL DISTRIBUTIONS (242,990 (30,615
) )
Share transactions 214,691,266 232,403,520
Net proceeds from sales of shares
Reinvestment of distributions 238,389 29,289
Cost of shares redeemed (128,994,157 (167,302,323
) )
Net increase (decrease) in net assets resulting from share transactions 85,935,498 65,130,486
TOTAL INCREASE (DECREASE) IN NET ASSETS 76,852,432 74,276,383
NET ASSETS
Beginning of period 95,977,496 21,701,113
End of period (including accumulated net investment (loss) of $(336,797) and $(237,885),
respectively) $ 172,829,928 $ 95,977,496
OTHER INFORMATION
Shares
Sold 11,692,592 13,751,993
Issued in reinvestment of distributions 13,408 2,020
Redeemed (7,146,795 (9,894,449
) )
Net increase (decrease) 4,559,205 3,859,564
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
SIX MONTHS YEARS ENDED OCTOBER 31,
ENDED
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
1993 1992 1991 1990 1989
Net asset value, beginning of period
$ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45 $ 12.74
Income from Investment Operations
Net investment income
(.03) (.15) (.02)** .03** .05** .02**
Net realized and unrealized gain (loss) on investments
(.37) 3.76 (1.11) 3.59 (1.24) 2.96
Total from investment operations
(.40) 3.61 (1.13) 3.62 (1.19) 2.98
Less Distributions
From net investment income
- - - (.02) - (.06) (.01) (.12)
From net realized gain
- - (.92) (.85) (.68) (.15)(s diamond)
In excess of net realized gain
(.04) - - - - -
Total distributions
(.04) (.02) (.92) (.91) (.69) (.27)
Net asset value, end of period
$ 17.38 $ 17.82 $ 14.23 $ 16.28 $ 13.57 $ 15.45
TOTAL RETURN (dagger)(diamond)
(2.25)% 25.40% (7.09)% 28.13% (8.16)% 23.94%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 172,830 $ 95,977 $ 21,701 $ 23,327 $ 17,736 $ 24,331
Ratio of expenses to average net assets
1.74%* 2.00% 2.00% 2.01% 2.05% 2.06%
Ratio of expenses to average net assets before expense
1.74%* 2.00% 2.07% 2.26% 2.31% 2.87%
reductions
Ratio of net investment income to average net assets
(.47)%* (.66)% (.11)% .17% .34% .16%
Portfolio turnover rate
47%* 131% 55% 68% 164% 152%
* ANNUALIZED
** NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED USING AVERAGE SHARES OUTSTANDING.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED TRANSACTIONS
TAXABLE AS ORDINARY INCOME.
(diamond) THE TOTAL RETURN WOULD HAVE BEEN LOWER IF THE ADVISER HAD NOT REDUCED EXPENSES OF THE FUND
DURING THE PERIODS SHOWN.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR
ARE NOT ANNUALIZED.
</TABLE>
EUROPE
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). The fund has a
3% sales charge.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTHS YEAR YEARS FUND
EUROPE 9.09% 20.90% 53.27% 124.39%
EUROPE
(INCL. 3% SALES CHARGE) 5.82% 17.27% 48.67% 117.66%
Morgan Stanley Europe
Index 7.90% 21.81% 66.54% 130.43%
Average European Region
Fund 9.07% 23.06% 47.29% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on October 1, 1986. You can compare the fund's
figures to the performance of the Morgan Stanley Europe index - a broad
measure of the performance of stocks in Europe, weighted by each country's
market capitalization (or the total value of its outstanding shares). You
can also compare the fund's performance to the average European region fund
which reflects the performance of 33 funds with similar objectives tracked
by Lipper Analytical Services. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
EUROPE 20.90% 8.92% 11.24%
EUROPE
(INCL. 3% SALES CHARGE) 17.27% 8.25% 10.80%
Morgan Stanley Europe
Index 21.81% 10.74% 11.63%
Average European Region
Fund 23.06% 7.89% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Europe (301) MS Europe Index
10/01/86 9700.00 10000.00
10/31/86 9690.30 10061.24
11/30/86 10078.30 10600.17
12/31/86 10485.70 10866.14
01/31/87 11563.06 11347.33
02/28/87 12300.92 11751.88
03/31/87 12922.28 12332.46
04/30/87 13456.26 12815.21
05/31/87 13679.56 12743.90
06/30/87 14232.95 13107.17
07/31/87 15252.37 13548.56
08/31/87 15572.75 13660.75
09/30/87 16135.86 13749.78
10/31/87 11737.82 11135.61
11/30/87 11213.55 10645.49
12/31/87 12048.50 11264.74
01/31/88 11475.68 10802.62
02/29/88 11533.94 11438.32
03/31/88 12067.91 11753.00
04/30/88 12407.72 11972.00
05/31/88 12271.80 11748.03
06/30/88 11999.95 11629.54
07/31/88 11873.74 11655.59
08/31/88 11252.38 11126.51
09/30/88 11776.65 11732.04
10/31/88 12582.48 12818.60
11/30/88 12737.81 12976.68
12/31/88 12751.83 13046.37
01/31/89 13357.17 13518.81
02/28/89 13386.94 13365.30
03/31/89 13615.18 13462.17
04/30/89 14200.67 13835.82
05/31/89 13813.65 13126.86
06/30/89 14190.75 13668.45
07/31/89 15460.97 15277.34
08/31/89 15341.89 15086.51
09/30/89 16036.54 15345.58
10/31/89 14925.09 14339.46
11/30/89 15798.37 15135.61
12/31/89 16874.84 16764.74
01/31/90 17085.65 16719.83
02/28/90 16643.95 16319.18
03/31/90 17145.88 16549.43
04/30/90 16804.57 16110.24
05/31/90 17838.54 17421.38
06/30/90 18581.39 18033.25
07/31/90 19705.71 18792.65
08/31/90 17356.69 16929.38
09/30/90 15640.09 14935.59
10/31/90 16342.79 16194.23
11/30/90 16322.71 16356.96
12/31/90 16100.11 16120.73
01/31/91 16418.62 16663.17
02/28/91 17415.24 18120.73
03/31/91 16480.27 16904.64
04/30/91 16439.17 16727.91
05/31/91 16511.09 17221.35
06/30/91 15062.39 15776.03
07/31/91 15822.70 16867.89
08/31/91 16141.21 17175.85
09/30/91 16726.85 17692.04
10/31/91 16367.25 17319.34
11/30/91 15874.07 16911.64
12/31/91 16769.90 18234.47
01/31/92 16844.24 18229.22
02/29/92 17046.03 18299.21
03/31/92 16461.90 17658.79
04/30/92 17545.20 18633.42
05/31/92 18405.47 19693.79
06/30/92 18235.54 19327.03
07/31/92 17577.06 18636.54
08/31/92 17630.16 18575.77
09/30/92 17354.03 18268.54
10/31/92 16058.32 16993.88
11/30/92 16047.70 16985.58
12/31/92 16346.72 17375.24
01/31/93 16260.11 17404.43
02/28/93 16357.54 17603.55
03/31/93 17429.28 18509.13
04/30/93 18003.04 18917.36
05/31/93 18219.55 19120.87
06/30/93 17710.75 18841.54
07/31/93 17721.57 18906.21
08/31/93 19161.38 20565.25
09/30/93 19139.73 20501.36
10/31/93 19951.65 21355.45
11/30/93 19561.93 20894.47
12/31/93 20787.26 22463.18
01/31/94 22287.60 23607.14
02/28/94 21765.74 22771.11
03/31/94 21156.91 22126.61
04/30/94 21765.74 23042.85
Let's say you invested $10,000 in Fidelity Europe Fund on its start date
and paid the 3% sales charge. By April 30, 1994, it would have grown to
$21,766 - a 117.66% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley Europe index, which would have grown
to $23,043 over the same period - a 130.43% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
EUROPE
FUND TALK: THE MANAGER'S OVERVIEW
Interview with Sally Walden,
Portfolio Manager of Fidelity Europe Fund
Q. SALLY, HOW HAS THE FUND PERFORMED?
A. During the past six months, the fund's performance was in line with
other European funds. For the six months ended April 30, 1994, the fund's
total return was 9.09%, compared to the average European fund which
returned 9.07%, according to Lipper Analytical Services. For the same
period the Morgan Stanley Europe index returned 7.90%. During the 12 months
ended April 30, the fund returned 20.90%, compared to 23.06% for the
average fund and 21.81% for the index.
Q. THE EUROPEAN STOCK MARKETS GENERALLY OUTPACED THE U.S. MARKET DURING THE
PERIOD. WHAT TRIGGERED THE MARKETS' AND THE FUND'S GAINS?
A. While you can't tell just by looking at the numbers, most of those gains
came in late 1993 and January 1994 and were driven by falling European and
U.S. interest rates. But when U.S. interest rates began to rise in
February, European stock markets suffered a setback, as did most other
world markets. At that point, investors started to reassess whether the
relatively high prices for European stocks continued to make sense. After
Europe's strong showing in 1993, it really wasn't that surprising that
investors used higher interest rates as a reason to take a breather.
Q. DID YOU HAVE AN ALLOCATION TARGET FOR SPECIFIC COUNTRIES OR INDUSTRIES?
A. No, I focus on picking stocks, not picking the right industries or
countries to be in. I try to build the fund "brick by brick," investing in
companies with very low debt, strong management and good growth prospects.
During the period, cyclicals, which tend to rise when the economy is
improving, led the European markets and posted strong gains. While it may
have helped the fund's performance in the short-term to load up on cyclical
companies, one of my investment themes is to emphasize stocks that do well
because they're growing, not because they'll do well in a given economic
cycle. I focused instead on companies that I'm happy to own for quite a
long time. One example is the fund's largest investment - Nokia, the
Finnish cellular company, which was one of the fund's best performers
during the period. Another telecommunications company, Italy's SIP Spa,
also did well during the period. What's more, I believe it's likely that
the company will spin off its cellular activities later this year, which I
think could send the stock even higher.
Q. SIX MONTHS AGO YOU SAID YOU WOULD CONTINUE EMPHASIZING PHARMACEUTICAL
STOCKS. HOW DID THAT STRATEGY WORK OUT?
A. The fund's pharmaceuticals and drug stocks posted mixed results during
the past six months. The German company Schering did well, boosted by
higher-than expected sales of Betaseron (its drug for treating multiple
sclerosis), its aggressive cost-cutting program and its increasingly strong
sales in the United States, Southeast Asia and Latin America. The Swiss
drug company, Ares Serono, on the other hand, suffered from concerns
surrounding health care reform in Italy. But I'm still optimistic about the
company because its earnings growth is driven primarily by its fertility
treatment business. The company has 70% of the global market share of that
business, and has recently introduced a purer, more effective version of
its treatment.
Q. THE FUND HAS SIGNIFICANT INVESTMENTS IN TELEVISION AND OTHER MEDIA
STOCKS. WHAT'S THE ATTRACTION?
A. Media stocks generally are a fast-growing sector and continent-wide
deregulation of the industry continues to provide investors with plenty of
opportunities. Remember, commercial television didn't really exist in many
European countries five years ago and the industry is still in its early
stages in many countries. Advertising revenues for many media companies
have continued to climb, despite Europe's recession, and many of the fund's
investments enjoyed increased revenues. Going forward, I think companies
like Audiofina in Belgium and TF-1 in France could benefit as the economy
improves and advertising revenues improve. Scottish Television was one of
the fund's investments in this sector that didn't work out as well as I'd
hoped. In 1993, a speculative furor surrounded U.K. television stocks, and
when that bubble burst, companies like Scottish Television got caught in
the down draft. But I'm optimistic about the company because I think its
earnings will be surprisingly good in 1995.
Q. FINANCIAL STOCKS WERE AMONG THE FUND'S TOP PERFORMERS IN 1993. HOW HAVE
THEY FARED RECENTLY?
A. They haven't done nearly as well and many investors seem to believe that
interest rates have stalled, and aren't likely to fall from current
levels. There's also the fear that rates may rise from here, so many
investors abandoned financial companies altogether. But in my view, it's
like throwing the baby out with the bath water. Financial stocks are quite
cheap right now, and an economic recovery could improve their prospects as
demand for new loans increases and the quality of loans improves. For these
reasons, I still like the French financial company BNP, although it hasn't
performed that well recently. France privatized a number of financial
companies recently, and so there was a flood of new stock available in this
sector, which somewhat artificially depressed prices. However, I think it's
just a temporary technical glitch in the market, and over the long term the
company's prospects are good. Holland's International Nederlanden Groep, a
bank card insurance group, is also attractive. The demand for insurance
continues to grow and premiums are rising. Also, the company is extremely
well-managed, with significant operations in Japan and Eastern Europe, as
well as Western Europe.
Q. YOU HAVE A FAIRLY LARGE NUMBER OF INVESTMENTS IN THE FUND. WOULDN'T IT
BE SIMPLER TO HAVE FEWER STOCKS?
A. Maybe, but I think it's important to diversify the fund over a wide
range of companies in a broad list of industries. I think that helps make
the fund's returns less volatile. I also believe that in Europe there are
an enormous number of interesting ideas, and I like to have a piece of as
many I can manage.
Q. THERE'S BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DOES THE FUND USE
THEM?
A. The fund has the authority to use derivatives to help manage its
investments more efficiently. Like many international funds, I occasionally
use currency hedging to protect the fund from currency volatility. That's
probably the only derivative strategy I've used.
Q. WHAT'S AHEAD FOR THE FUND?
A. I'm more optimistic about European economies than I was six months ago,
since I believe we're starting to see tangible signs that things are
finally beginning to improve. Last year the European stock markets rose
mostly because of falling interest rates. During 1994 improved company
earnings will most likely be the market's key driving force. So I'll
continue to focus on good companies that have managed to survive and thrive
during the economic downturn. In my opinion, these companies are best
positioned to make the most of the upturn when it comes.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in common stocks
in Western Europe
START DATE: October 1, 1986
SIZE: as of April 30, 1994, more than $484 million
MANAGER: Sally Walden, since July 1992; also
manages various funds for non-U.S. investors,
joined Fidelity in 1984
(checkmark)
SALLY WALDEN'S OUTLOOK FOR EUROPEAN ECONOMIES:
"While I had assumed that some sort of recovery would
take place in 1994, I was somewhat surprised that
things started to look better so soon. Generally,
European economies are improving although the pace
of the recovery varies from country to country. The
United Kingdom is more in line with the United States,
and the recovery there has been underway for about
18 months. In Germany, there's quite a lot of evidence
that suggests things are beginning to turn around.
German exporters are seeing high demand for their
products, despite the fairly strong currency. And in
France, industrial companies are reporting fairly strong
upticks in export orders as well, although not as
strong as in Germany. The Nordic region, too, has
seen some positive signs, largely due to the
devaluation of its currencies a year and a half ago
and a resulting export boom. There are now strong
signs that this recovery is feeding through to the
domestic economy.
"Even though most European companies don't report
quarterly earnings, the few that have are showing
promising results. To me, that indicates that things
really are improving faster than most investors initially
believed. "
(bullet) The fund's largest investment is Finnish cellular
company Nokia. The company is one of the world's
largest cellular companies, with major businesses in
Europe, Southeast Asia and the United States.
(bullet) Those European countries with the greatest
percentage of the fund's total investments at the end of
April were the United Kingdom, 24.8%, compared to
27.1% six months ago; Germany, 11.5%, compared to
11.0%; France, 11.3%, compared to 14.4%; and
Switzerland, 9.7%, compared to 8.8%.
EUROPE
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 3.6%
Belgium 6.1%
Row: 1, Col: 1, Value: 6.1
Row: 1, Col: 2, Value: 6.6
Row: 1, Col: 3, Value: 11.3
Row: 1, Col: 4, Value: 11.5
Row: 1, Col: 5, Value: 9.9
Row: 1, Col: 6, Value: 5.1
Row: 1, Col: 7, Value: 4.6
Row: 1, Col: 8, Value: 6.6
Row: 1, Col: 9, Value: 6.2
Row: 1, Col: 10, Value: 9.699999999999999
Row: 1, Col: 11, Value: 24.8
Row: 1, Col: 12, Value: 3.6
Finland 6.6%
United
Kingdom 24.8%
France 11.3%
Germany 11.5%
Switzerland 9.7%
Sweden 6.2%
Italy 3.9%
Spain 6.6%
Netherlands 5.1%
Other 4.6%
AS OF OCTOBER 31, 1993
United States 2.9%
Belgium 4.8%
Row: 1, Col: 1, Value: 4.8
Row: 1, Col: 2, Value: 4.9
Row: 1, Col: 3, Value: 14.4
Row: 1, Col: 4, Value: 11.0
Row: 1, Col: 5, Value: 2.3
Row: 1, Col: 6, Value: 3.2
Row: 1, Col: 7, Value: 6.8
Row: 1, Col: 8, Value: 2.8
Row: 1, Col: 9, Value: 6.8
Row: 1, Col: 10, Value: 4.2
Row: 1, Col: 11, Value: 8.800000000000001
Row: 1, Col: 12, Value: 27.1
Row: 1, Col: 13, Value: 2.9
Finland 4.9%
United
Kingdom 27.1%
France 14.4%
Germany 11.0%
Switzerland 8.8%
Ireland 2.3%
Sweden 4.2%
Italy 3.2%
Spain 6.8%
Netherlands 6.8%
Other 2.8%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 97.3 97.6
Bonds 0.1 0.4
Short-term investments 2.6 2.0
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Nokia AB Free shares
(Finland, Communications Equipment) 2.9 2.3
Schering
(Germany, Drugs and
Pharmaceuticals) 2.2 2.6
SIP Spa
(Italy, Telephone Services) 2.2 1.3
Audiofina
(Belgium, Broadcasting) 1.8 1.3
Reisebuero Kuoni AG Part. Cert.
(Switzerland, Entertainment) 1.6 1.3
Gehe AG
(Germany, Medical Supplies and Equipment)
1.2 1.2
BBC Brown Boveri & Cie (Bearer) (Switzerland, Electrical Equipment)
1.2 1.1
VNU Ord.
(Netherlands, Publishing) 1.1 1.2
Oerlikon-Buhrle Holding Ltd. (Reg.)
(Switzerland, Aerospace & Defense) 1.1 -
ICB Shipping Class B
(Sweden, Shipping) 1.1 -
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 16.3 21.4
Media & Leisure 14.6 13.8
Health 9.4 10.7
Utilities 8.2 8.2
Nondurables 6.9 6.9
Durables 6.9 3.2
Retail & Wholesale 6.8 6.0
Construction & Real Estate 5.8 5.9
Industrial Machinery & Equipment 5.0 4.6
Technology 4.8 4.2
EUROPE
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 93.8%
SHARES VALUE (NOTE 1)
BELGIUM - 6.1%
Audiofina 16,836 $ 8,589,166
Audiofina (rights) (b) 16,836 27,150 05099296
Colruyt NV NPV 13,100 3,111,137 19681599
GB-INNO-BM Group SA 89,665 4,127,484 36149699
Generale de Banque SA 17,802 4,520,115 37199592
Immob de Belgique (b) 24,695 2,353,180 45099592
Quick Restaurants SA (b) 55,695 3,853,817 74899B22
UCB Group (b) 3,797 2,610,636 90262799
29,192,685
BERMUDA - 0.4%
Bona Shipholdings Ltd. 200,000 1,875,000 09776C92
DENMARK - 0.6%
Tele Denmark AS Class B 63,235 3,036,683 87924292
FINLAND - 5.5%
Amer Group Ltd. Class A 126,675 3,263,570 02351210
Kone Corp. Class B Ord. 28,850 3,350,111 50400092
Nokia AB Free shares 160,600 13,791,970 65599992
Outokumpu OY Class A (b) 69,000 1,110,400 69099992
Repola OY 187,100 3,325,323 75999A92
WSOY (Werner Soderstrom) Class B (b) 24,600 1,676,297 94299J23
26,517,671
FRANCE - 11.3%
Assurances Generales (Reg.) 37,605 3,608,964 04557510
BIC 21,375 5,043,412 08899292
BNP (b) 11,788 2,208,427 05599994
BNP Ord. 102,095 4,788,973 05599996
Ecco SA 27,165 3,543,261 27399292
Eiffage SA (b) 11,220 2,538,282 27599522
Eurafrance (Societe) (b) 415 153,296 29899892
Fructivie SA 96 13,234 33099092
Immeubles de France, Ste Des (b) 36,576 3,652,429 44999C22
Omnium Gestion Financement SA 19,286 2,928,009 68099792
Publications Filippachi 14,500 2,362,849 75599999
Renault SA Part. Cert. (b) 10,470 4,552,174 75999F92
Salomon SA 7,164 2,671,622 93099292
Scor SA 25,900 2,352,881 80999992
TF-1 59,100 4,951,113 90399999
Taittinger SA 4,400 2,239,661 87657794
Thomson C.S.F 77,200 2,325,005 88431610
Total Compagnie Francaise des Petroles
Class B 65,158 3,788,791 20434510
Union Assurances Federale SA 7,000 728,703 91899F24
54,451,086
GERMANY - 9.3%
Ava Alg Handels Verbrauchen 6,914 3,356,676 05399692
Bayerische Motor Werke (BMW) (b) 8,000 4,357,920 05528310
Bayer AG 20,336 4,841,788 07273010
Duerr Beteiligungs AG 10,050 4,271,554 26499292
Gehe AG 16,781 5,945,384 68199492
Gehe AG (Rfd.) 4,709 1,625,658 68199497
Holsten Brauerei AG 5,254 1,810,629 43899D92
Otto Reichelt AG 17,820 4,029,432 69199A92
Schering 15,700 10,507,780 80658510
Veba Vereinigte Elektrizetaets &
Bergwerks AG Ord. 13,491 4,191,672 92239110
44,938,493
IRELAND - 1.2%
CRH PLC 578,950 3,356,086 12626K10
IWP International (U.K. Reg.) 450,000 2,526,638 45199A93
5,882,724
SHARES VALUE (NOTE 1)
ITALY - 3.9%
Edison Spa 728,150 $ 4,132,713 28099092
Fila Holding Spa sponsored ADR (b) 187,200 2,597,400 31685010
Istituto Mobiliare Italiano 169,550 1,406,033 45777M92
SIP Spa 3,469,200 10,380,958 78401792
18,517,104
NETHERLANDS - 5.1%
Heineken NV 39,425 5,024,484 42301210
International Nederlanden Groep CVA 103,070 4,308,231 46099892
PolyGram NV Ord. 87,200 3,602,607 73173392
Unilever NV ADR 43,110 4,785,210 90478450
VNU Ord. (b) 56,410 5,441,978 92399010
Wereldhave NV 25,000 1,483,975 95199E22
24,646,485
NORWAY - 1.6%
Color Lines 590,285 2,388,783 19699492
Smedvig Tankships Ltd. (b) 10,350 96,768 83169E92
Smedvig Tankships Ltd. Ord. (c) 258,500 2,358,813 83169E20
Veidekke AS 111,800 2,964,234 93699592
7,808,598
PORTUGAL - 0.7%
Banco Espirito Santo (Lisbon) (Reg.) 185,600 3,436,028 06699M22
SPAIN - 6.6%
Banco Popular Espanol 23,410 2,723,124 05999110
Corporacion Financiera Alba 99,700 4,450,860 15199010
Corporacion Mapfre International Reas
(Reg.) (b) 101,180 4,291,460 16899192
El Aguila SA 279,130 3,244,853 28299292
Empresa Nacional de Electricidad SA
Ord. 83,530 4,144,701 29244710
FOCSA (Fomento de Obras Y
Construcciones SA) 42,905 4,764,566 34418599
Hidro Cantabrico 70,500 2,194,206 42899999
Iberdrola SA 311,095 2,234,570 45499892
Repsol SA Ord. (b) 110,870 3,697,725 76026T10
31,746,065
SWEDEN - 6.2%
Arjo AB 144,100 2,289,073 04069792
Astra A Free shares 171,585 3,559,153 04632292
Avesta Sheffield AB Ord. Free shares (b) 392,850 2,578,738 05399892
Bergman & Beving AB B Free shares 147,910 2,815,633 08399622
Custos AB A Free shares 141,200 2,168,857 23299A22
ICB Shipping Class B (b) 432,100 5,218,943 44999B92
SKF AB Ord. (b) 155,600 3,207,153 78437530
Skandia Forsikring (rights) (b) 211,450 241,512 83055592
Skandia International Holding Co.
AB ADR 211,450 3,803,108 83055510
Volvo Aktiebolaget Class B 43,200 4,032,401 92885630
29,914,571
SWITZERLAND - 9.7%
Ares Serono SA B (Bearer) 9,090 4,929,972 03999392
BBC Brown Boveri & Cie (Bearer) 6,150 5,654,064 05599099
Baloise Holding (Reg.) (b) 2,525 4,624,773 05899195
Intershop Holding AG (Bearer) 5,200 2,334,747 46299592
Nestle SA (Reg.) 3,556 2,972,731 64106992
Oerlikon-Buhrle Holding Ltd. (Reg.) (b) 50,475 5,395,895 67199092
Reisebuero Kuoni AG:
(Bearer) 50 1,567,901 75999593
Part. Cert. 4,966 7,786,195 75999592
Roche Holdings Ltd. Part. Cert. 816 3,908,007 77157092
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
SWITZERLAND - CONTINUED
Swiss Bank Corp. (Bearer) (b) 13,100 $ 3,659,765 87083610
Swiss Reinsurance Corp.:
(Reg.) (b) 9,043 3,853,981 87099393
(warrants) (b) 8,650 29,282 87099D22
46,717,313
UNITED KINGDOM - 24.6%
Abbey National PLC Ord. 455,940 3,009,717 00281099
Allied Lyons PLC (b) 294,850 2,626,443 01925510
Angerstein Underwriting Trust PLC 1,755,000 2,716,477 03499A22
Argyll Group PLC Ord. 729,141 2,544,884 04099210
Arjo Wiggins Appleton PLC 555,600 2,655,837 04199592
Associated British Ports Ord. 797,780 3,353,448 04599392
BAA PLC Ord. 228,667 3,386,741 10999999
Burton Group PLC Ord. 2,199,150 1,835,466 12304910
CLM Insurance Fund PLC 1,580,000 2,373,674 18899322
Cadbury-Schweppes PLC Ord. 615,116 4,461,836 12720910
Chubb Security (b) 499,600 2,987,083 17299B92
Compass Group Ord. 507,800 2,442,759 20499192
De La Rue Co. (b) 186,733 2,616,897 24642110
Hazlewood Foods Ord. 886,600 2,004,669 42199292
Kingfisher PLC 329,284 2,883,204 98088610
Kwik Save Group PLC Ord. (b) 204,305 1,705,181 50124310
London Insurance Market Investment
Trust PLC 90,000 135,210 54199F22
MFI Furniture Group PLC 1,305,777 3,170,427 55299392
McDonnell Info. Systems Group PLC 292,576 1,145,479 58099722
Mirror Group Newspaper PLC (b) 1,799,100 4,668,539 60499792
North West Water Ord. 344,050 2,521,725 67299195
Pearson PLC 273,000 2,696,948 70509991
Prudential Corp. 835,355 3,904,366 74399992
Racal Electronics Ltd. Ord. (b) 1,047,400 3,790,792 74981510
Rank Organization PLC 532,500 3,470,654 75304110
Royal Bank of Scotland Ord. 596,000 3,644,853 78009792
Scottish & Newcastle Brewers PLC 523,662 4,148,110 80987810
Scottish Hydro-Electric PLC Ord. 284,075 1,476,462 81013395
Scottish Power PLC 32,700 176,407 81013T96
Scottish Power PLC ADR (c) 41,300 2,168,250 81013T40
Scottish Television PLC (b) 685,640 4,609,232 81099210
Smith (W.H.) Group A Ord. 362,000 2,735,688 83199392
SmithKline Beecham PLC Ord. units 496,050 2,679,811 83237850
Takare PLC Ord. 1,267,000 4,941,268 94499792
Tesco PLC Ord. (b) 1,323,800 4,218,620 88157510
Ulster Television Ord. (b) 285,000 2,646,823 94299492
United Newspapers PLC Ord. 265,260 2,531,927 91120210
Vendome Luxury Group PLC SA units (b) 397,569 2,624,403 92299E22
Vodafone Group PLC (b) 403,925 3,331,417 92857T92
Wickes PLC 1,547,900 2,525,109 96699392
Willis Coroon PLC Ord. (b) 810,500 2,828,848 97062410
Zeneca Group PLC Ord. (b) 200,500 2,093,300 98934D92
118,488,984
UNITED STATES OF AMERICA - 1.0%
International Cabletel, Inc. (b) 215,000 4,676,250 45921610
TOTAL COMMON STOCKS
(Cost $377,994,216) 451,845,740
PREFERRED STOCKS - 3.5%
SHARES VALUE (NOTE 1)
CONVERTIBLE PREFERRED STOCKS - 0.2%
UNITED KINGDOM - 0.2%
Mai PLC 5.90% cumulative 507,530 $ 831,791 55699093
NONCONVERTIBLE PREFERRED STOCKS - 3.3%
FINLAND - 1.1%
Nokia AB 63,900 5,439,872 65599910
GERMANY - 2.2%
Boss (Hugo) AG 5,800 3,688,996 44451094
Krones AG 575 990,780 50199A93
Moebel Walther AG 5,900 2,407,799 61099B22
Porsche AG NV:
Ord. (b) 5,150 2,718,229
(Rfd.) 1,287 665,287 73380193
10,471,091
TOTAL NONCONVERTIBLE PREFERRED STOCKS 15,910,963
TOTAL PREFERRED STOCKS
(Cost $10,449,234) 16,742,754
CONVERTIBLE BONDS - 0.1%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
NORWAY - 0.1%
Color Lines 7 1/2%,
12/31/00 (Cost $349,082) - NOK 2,433 349,700 73380193
REPURCHASE AGREEMENTS - 2.6%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.56% dated
4/29/94 due 5/2/94 $ 12,725,774 12,722,000
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $401,514,532) $ 481,660,194
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO BUY
3,643,750,000 ESP 5/3/94 $ 27,053,264 $ (37,814)
7,881,600 NLG 5/2/94 4,244,791 45,750
TOTAL CONTRACTS TO BUY
(Payable amount $31,290,119) $ 31,298,055 $ 7,936
THE VALUE OF CONTRACTS TO BUY AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 6.5%
FORWARD FOREIGN CURRENCY CONTRACTS - CONTINUED
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
12,778,665 BEF 5/4/94 $ 13,483,777 $ (705,112)
7,287,500,000 ESP 5/3/94 to
8/4/94 53,901,806 (1,465,580)
15,763,200 NLG 5/2/94 to
8/2/94 8,480,571 (277,950)
70,830,500 NOK 5/5/94 9,293,180 (428,841)
TOTAL CONTRACTS TO SELL
(Receivable amount $82,281,851) $ 85,159,334 $ (2,877,483)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 17.7%
CURRENCY ABBREVIATIONS
BEF - Belgian franc
NLG - Dutch guilder
NOK - Norwegian krone
ESP - Spanish peseta
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $4,527,063 or 0.9% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $144,387,468 and $223,840,405, respectively.
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $61,887,000 and $19,804,595, respectively. The
weighted average interest rate was 3.58%. Interest expense includes $72,956
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $401,845,971. Net unrealized appreciation aggregated
$79,814,223, of which $95,490,093 related to appreciated investment
securities and $15,675,870 related to depreciated investment securities.
At October 31, 1993, the fund had a capital loss carryforward of
approximately $49,180,000 of which $7,285,000, $4,932,000 and $36,963,000
will expire on October 31, 1996, 1998, and 1999, respectively.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 1.6%
Basic Industries 3.0
Construction & Real Estate 5.8
Durables 6.9
Energy 1.6
Finance 16.3
Health 9.4
Industrial Machinery & Equipment 5.0
Media & Leisure 14.6
Nondurables 6.9
Repurchase Agreements 2.6
Retail & Wholesale 6.8
Services 2.5
Technology 4.8
Transportation 4.0
Utilities 8.2
100.0%
EUROPE
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $12,722,000) (cost $401,514,532) $ 481,660,194
(Notes 1 and 2) - See accompanying schedule
Long foreign currency contracts held, at value (cost $31,290,119) 31,298,055
(Note 2)
Short foreign currency contracts (Note 2) $ (85,159,334
Contracts held, at value )
Receivable for contracts held 82,281,851 (2,877,483
)
Cash 745
Receivable for investments sold 8,007,486
Receivable for fund shares sold 3,894,823
Dividends receivable 2,958,016
Other receivables 976,885
TOTAL ASSETS 525,918,721
LIABILITIES
Payable for foreign currency contracts held (Note 2) 31,290,119
Payable for investments purchased 6,620,826
Payable for fund shares redeemed 2,666,869
Accrued management fee 270,961
Other payables and accrued expenses 472,388
TOTAL LIABILITIES 41,321,163
NET ASSETS $ 484,597,558
Net Assets consist of (Note 1):
Paid in capital $ 418,675,407
Distributions in excess of net investment income (857,715
)
Accumulated undistributed net realized gain (loss) on investments (10,496,249
)
Net unrealized appreciation (depreciation) on:
Investment securities 80,145,662
Foreign currency contracts (2,869,547
)
NET ASSETS, for 24,205,928 shares outstanding $ 484,597,558
NET ASSET VALUE and redemption price per share ($484,597,558 (divided by) 24,205,928 shares) (Note 4) $20.02
Maximum offering price per share (100/97.00 of $20.02) (Note 4) $20.64
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 4,449,730
Dividends
Interest 569,592
5,019,322
Less foreign taxes withheld (Note 1) (848,986
)
TOTAL INCOME 4,170,336
EXPENSES
Management fee (Note 4) $ 1,970,380
Basic fee
Performance adjustment (281,012
)
Transfer agent fees (Note 4) 1,136,303
Accounting fees and expenses 151,651
(Note 4)
Non-interested trustees' compensation 1,619
Custodian fees and expenses 179,100
Registration fees 47,869
Audit 19,148
Legal 4,309
Interest (Note 5) 72,956
Miscellaneous 3,522
Total expenses before reductions 3,305,845
Expense reductions (Note 6) (3,406 3,302,439
)
NET INVESTMENT INCOME 867,897
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 37,942,941
Foreign currency contracts 1,496,110 39,439,051
Change in net unrealized appreciation (depreciation) on:
Investment securities 4,948,245
Foreign currency contracts (4,467,188 481,057
)
NET GAIN (LOSS) 39,920,108
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 40,788,005
OTHER INFORMATION $583,554
Sales charges paid to FDC (Note 4)
Deferred sales charges withheld by $52,149
FDC (Note 4)
Accounting fees paid to FSC $150,946
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations $ 867,897 $ 7,012,018
Net investment income
Net realized gain (loss) on investments 39,439,051 (2,768,371
)
Change in net unrealized appreciation (depreciation) on investments 481,057 93,922,600
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 40,788,005 98,166,247
Distributions to shareholders from net investment income (2,098,090 (8,045,499
) )
Share transactions 318,038,416 549,154,003
Net proceeds from sales of shares
Reinvestment of distributions 2,047,929 7,889,216
Cost of shares redeemed (403,107,457 (549,458,481
) )
Net increase (decrease) in net assets resulting from share transactions (83,021,112 7,584,738
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (44,331,197 97,705,486
)
NET ASSETS
Beginning of period 528,928,755 431,223,269
End of period (including under (over) distribution of net investment income of $(857,715)
and $9,334,982, $ 484,597,558 $ 528,928,755
respectively)
OTHER INFORMATION
Shares
Sold 16,437,403 33,375,671
Issued in reinvestment of distributions 109,636 525,251
Redeemed (21,039,641 (33,714,940
) )
Net increase (decrease) (4,492,602 185,982
)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
1993 1992(tri) 1991 1990 1989
Net asset value, beginning of period
$ 18.43 $ 15.12 $ 15.93 $ 16.28 $ 15.04 $ 12.96
Income from Investment Operations
Net investment income
.03 .25 .27 .43(sub section) .46 .25(u tri)
Net realized and unrealized gain (loss) on investments
1.64 3.35 (.57) (.40) .97 2.11
Total from investment operations
1.67 3.60 (.30) .03 1.43 2.36
Less Distributions
From net investment income
(.08) (.29) (.48) (.35) (.19) (.24)
From net realized gain
- - - - (.03)(s diamond)(.03)(s diamond) - (.04)(s diamond)
Total distributions
(.08) (.29) (.51) (.38) (.19) (.28)
Net asset value, end of period
$ 20.02 $ 18.43 $ 15.12 $ 15.93 $ 16.28 $ 15.04
TOTAL RETURN (dagger)
9.09% 24.24% (1.89)% .15% 9.50% 18.62%
(u tri)
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 484,598 $ 528,929 $ 431,223 $ 297,831 $ 389,273 $ 97,288
Ratio of expenses to average net assets
1.31%* 1.25% 1.22% 1.31% 1.45% 1.89%
(u tri)
Ratio of expenses to average net assets before expense
1.31%* 1.25% 1.22% 1.31% 1.45% 1.94%
reductions
Ratio of net investment income to average net assets
.34%* 1.44% 2.38% 2.83% 2.87% 1.67%
Portfolio turnover rate
61%* 76% 95% 80% 148% 160%
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE
NOT ANNUALIZED.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED TRANSACTIONS TAXABLE
AS ORDINARY INCOME.
(tri) AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
(u tri) NET INVESTMENT INCOME PER SHARE INCLUDES A REIMBURSEMENT OF $.008 PER SHARE FROM FIDELITY SERVICE CO.
FOR ADJUSTMENTS TO PRIOR PERIODS' FEES. IF THIS EXPENSE
REDUCTION HAD NOT EXISTED, THE TOTAL RETURN WOULD HAVE BEEN LOWER.
(sub section) INCLUDES $.05 PER SHARE FROM RECOVERY OF FOREIGN TAXES PREVIOUSLY WITHHELD ON DIVIDEND AND
INTEREST PAYMENTS.
</TABLE>
EUROPE CAPITAL APPRECIATION
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Europe Capital
Appreciation Fund has a 3% sales charge, which has been waived since the
fund's start on December 21, 1993 through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED LIFE OF
APRIL 30, 1994 FUND
EUROPE CAPITAL APPRECIATION 15.90%
Morgan Stanley Europe Index 3.94%
Average European Region Fund n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case since the fund started on December 21,
1993. You can compare the fund's figures to the performance of the Morgan
Stanley Europe index, a broad measure of the performance of stocks in
Europe, weighted by each country's market capitalization (or the total
value of its outstanding shares). In the fund's next report you will be
able to compare the fund's performance to the average European region fund
which reflects the performance of 33 funds with similar objectives tracked
by Lipper Analytical Services. These benchmarks include reinvested
dividends and capital gains, if any, and exclude the effects of sales
charges.
AVERAGE ANNUAL TOTAL RETURNS
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year. In the fund's next report we'll report these
numbers for the fund and the benchmarks.
$10,000 OVER LIFE OF FUND
Europe Capital Apprec. (341) Europe Index
12/21/93 9700.00 10000.00
12/31/93 9729.10 10132.25
01/31/94 11145.30 10648.25
02/28/94 10670.00 10271.15
03/31/94 10786.40 9980.44
04/30/94 11242.30 10393.72
Let's say you invested $10,000 in Fidelity Europe Capital Appreciation Fund
on its start date. By April 30, 1994, it would have grown to $11,590 - a
15.90% increase on your initial investment. That compares to $10,000
invested in the Morgan Stanley Europe index, which would have grown to
$10,394 over the same period - a 3.94% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
EUROPE CAPITAL APPRECIATION
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Kevin McCarey,
Portfolio Manager of Fidelity Europe Capital
Appreciation Fund
Q. KEVIN, HOW HAS THE FUND PERFORMED?
A. The fund was launched on December 21, 1993. Since then, it has done
quite well, considering the lackluster performance of most European stock
markets. The fund's total return from its start date through April 30,
1994, was 15.90%. For comparison to its benchmark, the Morgan Stanley
Europe Index, we can look at the period from December 31, 1993, through
April 30, 1994. During that time, the fund returned 15.90%, compared to
3.94% for the index.
Q. WHAT HELPED THE FUND OUTDISTANCE THE BENCHMARK?
A. The fund's performance flowed primarily from individual stock selection.
I don't try to predict which countries' stock markets will deliver the
biggest gains. Instead, I look for the most attractive stocks across
Europe. During this period, I found a lot of inexpensive, interesting
stocks in Italy and Scandinavia. In Italy, there was considerable
uncertainty over the outcome of major elections in March, and that
depressed stock prices so I was able to find some excellent values. They
included SIP, which operates the country's telephone services, and auto
manufacturer Fiat. Such stocks rebounded smartly after the elections, and I
have since sold some of the fund's investment in them. In Scandinavia,
countries such as Sweden and Denmark have been taking steps to revive their
economies, such as devaluing their currencies to encourage exports and
lowering interest rates. The fund invested in firms such as Swedish paper
makers Munksjo and Modo.
Q. YOUR PORTFOLIO INCLUDED A FAIR NUMBER OF SMALL COMPANY STOCKS. WHY?
A. The European stock markets have been relatively strong since the Fall of
1992. But small stocks have not appreciated as much as some of the blue
chips that are more familiar to investors. Thus, I found some relatively
attractive opportunities among the small-cap sector. Small stocks tend to
outperform larger company shares when an economy is growing, because that
growth reduces the risk of buying shares in relatively unproven companies.
In fact, small company stocks already are starting to catch up with larger
company shares as European economies begin to show positive economic
growth. For example, I found a lot of attractive small company stocks in
Switzerland, where both foreign and Swiss investors tend to concentrate on
big blue chips such as Nestles, with its food empire, and Roche, the
pharmaceuticals manufacturer. My picks included less well-known stocks such
as Interdiscount, an electronic equipment and camera retailer.
Q. WHERE ELSE DID YOU FIND OPPORTUNITIES?
A. I focused on shares of firms that are likely to do well in the early
stages of economic recovery, since that is what we are seeing throughout
much of Europe. In addition to retailers and paper companies, I bought
shares of chemical stocks such as the German manufacturer Hoechst, and BIS,
a French temporary employment agency. And I invested in auto manufacturers
such as Volkswagen, Peugeot and Volvo, which performed well. Another
company that will benefit from economic growth in Europe is Philips, the
fund's largest investment, which has been a strong performer during recent
months. Philips owns the leading share of the European market for consumer
electronics. That business has not made much money in recent years, but the
firm's managers have done a great deal of cost-cutting to make it
profitable again, and shareholders should reap the rewards as consumer
demand grows in Europe. The firm also owns 75% of Polygram, one of the
world's most successful record companies.
Q. OIL PRICES HAVE BEEN WEAK FOR YEARS, YET THE FUND HELD A SIZABLE STAKE
IN ELF ACQUITAINE, THE FRENCH OIL PRODUCER. WHY?
A. In part, for the very reason you mention. Oil prices have declined in
real terms - after accounting for inflation - for longer than a decade. It
is difficult to predict the price of oil, but the price will likely rebound
somewhat as the world's economies grow stronger. When that happens, oil
stocks could do very well. Elf Acquitaine pays a good dividend and has an
excellent record for finding new oil reserves.
Q. DO THE FUND'S SHAREHOLDERS NEED TO WORRY ABOUT CURRENCY RISK?
A. If the dollar strengthens against European currencies, the fund will
suffer losses. During this period, I did not try to reduce that risk by
making offsetting investments - a strategy known as hedging. As it happens,
the absence of hedging worked in the fund's favor, since European
currencies gained value against the dollar. I won't do much hedging in the
future, either. Two reasons: First, it is extremely difficult to forecast
currency fluctuations. I would rather spend my time and energy finding good
stocks for the fund. Second, I make it a policy to hedge only 15% of the
fund's investments against currency fluctuations. That's apart from cash
holdings, which are all in U.S. dollar instruments such as Treasury bills.
Q. THOSE CASH HOLDINGS WERE AS HIGH AS 22% OF THE FUND'S INVESTMENTS DURING
THE PERIOD. WHY SO HIGH?
A. That percentage has declined to 14% recently, and I would expect it to
fall to 5% or less over time. Cash reserves were high in part because the
fund was growing rapidly, from $1 million to more than $300 million in
assets. It was not always possible to put all of that money to work in good
stocks immediately.
Q. WHAT IS THE OUTLOOK FOR THE FUND?
A. I don't think long-term interest rates in Europe will decline much
further from here, because the region's economies are now showing signs of
life. What's more, German long-term interest rates already are on the low
side looking at historical experience. Thus, I don't expect big interest
rate declines to fuel major stock market gains in Europe. I also think
European stock markets will continue to be somewhat hostage to the U.S.
stock market. If the U.S. market is flat, then European markets could be up
a little bit - perhaps 5%. Of course, the fund's returns will also depend
on whether I invest in the right stocks within those markets. I believe
that economically sensitive stocks will continue to do well during the next
year, although the ride may be bumpy over the near term. But I also may
increase the fund's investment in stocks of financial service companies,
which many investors are avoiding right now.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in common stocks
in Europe
START DATE: December 21, 1993
SIZE: as of April 30, 1994, more than $324 million
MANAGER: Kevin McCarey, since December
1993; manager, Plymouth Europe Fund (now
Fidelity Advisor Overseas Fund), 1992-1993;
Fidelity Select Regional Banks Portfolio,
1986-1989; joined Fidelity in 1985
(checkmark)
KEVIN MCCAREY ON THE FUND'S STRATEGY:
"I look for out-of-favor stocks that appear to be
attractively priced. That means that a lot of the fund's
investments are in shares of companies that have the
potential to turn around troubled operations or reduce
expenses. A good example of a turnaround stock
would be the fund's largest holding, Philips. If you
ignore the high value of its investment in recording
company Polygram, Philips' stock is trading at a
price only five times what I consider to be the
company's potential earnings several years from
now, while many companies are at 10 times earnings
or more. I also look for stocks of firms with
unappreciated growth potential, so that I can buy
them before they become well-known and their
stocks become expensive. Takare, the leading
operator of nursing homes in Great Britain, is an
example. It is one of the few companies I can think of
that seems fairly sure to be delivering good earnings
increases 10 years from now. One reason is that the
demographics of an aging population should provide
the company with plenty of customers. Meanwhile,
the stock is trading at a very attractive price."
(bullet) As of April 30, 1994, the fund's largest investments
by country include the Netherlands (16.8% of the
fund's total investment), France (15.5%), and
Germany (12.3%).
(bullet) The fund invested 14.3% of its holdings in cash
investments as of April 30, with the remaining 85.7%
in stocks.
(bullet) The fund's three largest holdings as of April 30
were Philips Electronics, an electrical equipment
manufacturer headquartered in the Netherlands; SIP
Spa, the Italian telephone operating company; and
Elf Aquitaine, the French oil producer.
EUROPE CAPITAL APPRECIATION
INVESTMENT SUMMARY
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
Belgium 2.5%
Row: 1, Col: 1, Value: 14.3
Row: 1, Col: 2, Value: 5.5
Row: 1, Col: 3, Value: 3.0
Row: 1, Col: 4, Value: 8.199999999999999
Row: 1, Col: 5, Value: 7.2
Row: 1, Col: 6, Value: 7.7
Row: 1, Col: 7, Value: 16.8
Row: 1, Col: 8, Value: 7.0
Row: 1, Col: 9, Value: 12.3
Row: 1, Col: 10, Value: 15.5
Row: 1, Col: 11, Value: 2.5
United
States 14.3%
France 15.5%
United
Kingdom 5.5%
Germany 12.3%
Switzerland 3.0%
Sweden 8.2%
Italy 7.0%
Spain 7.2%
Other 7.7%
Netherlands 16.8%
ASSET ALLOCATION
% OF FUND'S
INVESTMENTS
Stocks 85.7
Bonds -
Short-term investments 14.3
TOP TEN STOCKS
% OF FUND'S
INVESTMENTS
Philips Electronics
(Netherlands, Electrical Equipment) 4.7
SIP Spa
(Italy, Telephone Services) 3.2
Elf Aquitaine
(France, Oil & Gas) 2.4
Pirelli Tyre Holdings NV Ord.
(Netherlands, Auto, Tires & Accessories) 2.2
Telefonica de Espana SA Ord.
(Spain, Telephone Services) 2.2
Hoechst AG Ord.
(Germany, Chemicals & Plastics) 2.1
Lyonnaise des Eaux Dumez SA
(France, Water) 2.0
BASF AG
(Germany, Chemicals & Plastics) 1.9
KLM Royal Dutch Airlines Ord.
(Netherlands, Air Transportation) 1.9
BNP Ord.
(France, Banks) 1.8
TOP TEN INDUSTRIES
% OF FUND'S
INVESTMENTS
Basic Industries 13.9
Finance 13.8
Durables 8.9
Utilities 8.1
Industrial Machinery & Equipment 7.9
Retail & Wholesale 7.2
Energy 6.1
Transportation 5.6
Construction & Real Estate 5.4
Services 2.7
EUROPE CAPITAL APPRECIATION
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 82.0%
SHARES VALUE (NOTE 1)
AUSTRIA - 0.6%
Hemingway Holdings AG 7,500 $ 510,006 42399F22
Maculan Holding AG Ord. 14,800 1,426,813 55699592
1,936,819
BELGIUM - 2.5%
CMB (Cie Maritime Belge) Ord. 36,300 2,660,783 19999092
Generale De Belgique SA SOC Ord. 34,700 2,741,897 44999G22
Solvay 5,000 2,433,554 83425810
7,836,234
CZECH REPUBLIC - 0.9%
BVV Brno 2,100 346,458 12499322
Cement Hranice 1,200 57,372 15199K22
Fatra AS 6,139 723,481 31199622
IPS AS 9,035 577,969 44999H22
Tatra AS 20,000 262,000 87799B22
ZPS Zlin 9,600 769,248 98999T22
2,736,528
DENMARK - 0.5%
Thorkild Kristensen 30,000 1,481,424 88599A24
FINLAND - 0.9%
Interbank Osakepankki Class B 100,000 448,058 46299G22
Metsa Serla B 20,000 840,109 59299992
Okobank Class A (b) 25,000 247,365 69299222
Unitas Bank Ltd. B Free shares 517,500 1,381,559 90499123
2,917,091
FRANCE - 15.5%
BIS SA Ord. 56,000 3,186,992 05528110
BNP Ord. 120,000 5,628,844 05599996
Bollore Technologies SA (b) 14,100 897,137 09799E92
Carbonne-Lorraine (LE) 2,304 280,161 14199992
Cerus (Cie European Reunies):
Ord. 25,000 493,549 15799592
(rights) (b) 25,000 15,951 15799593
Club Mediterranee Ord. 5,000 365,854 18947230
Credit Lyonnais 20,350 1,988,963 22799392
Deveaux SA 900 85,737 25199L22
EBF (Epeda Bertrand Faure) SA 4,000 636,267 27899292
Elf Aquitaine 100,000 7,327,678 28627199
Euro Rscg. Worldwide SA 12,510 1,492,444 47299692
Louvre (Societe Du) Ord. 60,000 2,598,091 54690099
Lyonnaise des Eaux Dumez SA 60,000 6,288,441 55160010
Metaleurop SA 60,000 922,588 60299892
Michel Thierry SA 12,185 1,636,727 60099492
Pinault Printemps SA 15,000 2,709,438 72199393
SAGA (Soc. de Gerance & D'Armen) 15,000 1,617,179 78599E22
Thomson C.S.F 180,000 5,420,997 88431610
Total Compagnie Francaise des Petroles
Class B 50,000 2,907,388 20434510
Unibail (b) 2,825 254,639 90499592
Vallourec (b) 25,000 1,451,485 92017610
48,206,550
GERMANY - 9.5%
BASF AG 30,000 5,972,793 05526230
Hoechst AG Ord. 30,000 6,611,245 43439010
KSB (Klein Schanzlin & Becker) AG 1,000 329,504 49299794
Karstadt AG 10,000 3,802,902 48576499
Man AG Ord. (Frankfurt Reg.) (b) 15,000 4,167,171 56154210
Sixt AG Ord. (b) 3,809 1,255,082 83002199
Thyssen AG Ord. 12,000 2,077,146 88629110
Thyssen Industries AG 25,000 3,242,140 94499892
Volkswagen AG 6,500 2,067,110 92866210
29,525,093
SHARES VALUE (NOTE 1)
HUNGARY - 1.1%
Fotex (First Hung-Am Photo):
(Reg.) Aust. Ctf. (c) 305,000 $ 1,258,125 35099294
Ord. 450,000 2,207,875 35099293
Pick Szeged RT sponsored GDS
(b) (c) 1,000 60,000 71957110
3,526,000
ITALY - 6.3%
Caffaro Spa (Sta L'Ind Chim) Ord. 700,000 1,286,789 12799492
Fidis Spa Ord. 900,000 3,723,219 31650010
Marzotto Manf. Gae & Figli Spa Ord 351,000 2,595,326 57418910
Montedison Spa Ord. 1,000,000 996,390 61237610
SIP Spa 3,350,200 10,024,870 78401792
Sogefi Spa 300,000 888,237 83499L22
19,514,831
LUXEMBOURG - 0.7%
Arbed SA 15,000 2,155,014 03899030
NETHERLANDS - 16.8%
Ahrend Groep NV Ord. 5,200 419,305 00868899
Bam Groep NV 32,300 2,000,808 05999892
Hoogovens en Staalfabrieken (b) 80,000 3,111,231 43888410
KBB (Kon Bijenkorf Beheer) NV
Ord. 45,000 2,576,622 48130092
KLM Royal Dutch Airlines Ord. (b) 200,000 5,763,534 48251620
MacIntosh Confectionary Works (b) 90,400 2,980,060 58199292
Ned Lloyd (b) 120,000 5,009,426 63983210
Norit NV 100,000 1,185,026 61089099
Philips Electronics (b) 500,000 14,624,295 71833799
Pirelli Tyre Holdings NV Ord. (b) 686,175 6,837,727 72499092
Polynorm NV Ord. 40,700 3,957,097 73199E22
Samas-Groep NV 65,100 2,033,827 79499110
Schuttersveld Holdings NV 50,000 1,125,774 80899C22
Wereldhave NV 11,000 652,949 95199E22
52,277,681
NORWAY - 2.0%
Christiania Bank Free shares Ord. (b) 460,000 927,562 17100792
Den Norske Bank Class A Free shares (b) 370,000 999,078 25299792
Norsk Forsvarsteknologi AS 35,000 810,762 67599G22
Norske Skogindustrier AS:
Free shares (b) 100,000 2,372,281 66499594
(rights) (b) 100,000 26,514 66499596
Olav Thon Eiendomsselskp Ord. 38,000 551,486 67941099
Tomra Systems AS 230,000 436,499 95699692
Veidekke AS 10,000 265,137 93699592
6,389,319
PORTUGAL - 0.3%
Banco Portuguese Inv. Ord. 45,000 893,917 05999G93
SPAIN - 7.2%
Banco Central SA (Reg.) 170,000 3,712,535 05947010
Banco Pastor SA (b) 16,600 779,291 05999792
Fasa Renault Ord. 50,000 2,711,235 31199292
Hisalba (b) 163,600 2,928,698 46199592
Prosegur Comp Securidad SA (Reg.) 104,500 2,251,068 74291699
Telefonica de Espana SA Ord. 500,000 6,796,660 87938210
Uralita SA (b) 300,000 3,119,778 91799310
22,299,265
SWEDEN - 8.2%
ASG AB Class B Free shares Ord. 50,000 853,343 16599C22
Aritmos AB Free 6,000 96,892 04099A22
Celsius Industrier AB Class B 47,100 1,255,241 15199D22
Ericsson (L.M.) Telephone Co. Class B ADR 35,000 1,583,750 29482140
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
Foreningsbanken AB Class A Ord. (b) 700,000 $ 1,451,996 34599E22
Hoganas AB Class B Free shares (c) 36,000 486,800 43899M22
Investor AB Free shares B 106,600 2,613,035 46199A92
Mo Och Domsjoe (Modo) AB 68,700 2,705,754 61399792
Munksjo AB 400,000 3,098,292 62599922
SKF AB Ord. (b) 150,000 3,091,728 78437530
Scribona AB B Free shares (b) 7,100 46,606 81199B92
Skandinaviska Enskilda Banken Class C 200,200 1,274,723 88099224
Skane-Gripen AB Ord. 300,000 2,579,721 93056099
Stena Line AB B Free shares 100,000 741,752 85899422
Svedala (b) 20,000 488,375 91199A92
Trellebord AB Class C Free shares 50,000 735,188 89491092
Volvo Aktiebolaget Class B 25,000 2,330,712 92885630
25,433,908
SWITZERLAND - 3.0%
Baloise Holding AG 665 1,189,573 05899192
Globus Magazine Part. Cert. 366 243,887 37957792
Interdiscount Holding Part. Cert. 33,525 5,136,924 45899594
Rentsch Industries Holding AG 250 374,158 76099A22
Von Moos Holdings AG Ord. 10,275 1,237,555 94099293
Zschokke Holding AG (Bearer) 900 506,717 98999R23
Zuercher Zieheleien Holding (Bearer) 1,000 726,936 91099292
9,415,750
TURKEY - 0.5%
Netas SA B Ord. (Bearer) 700,000 286,223 64199527
Trakya Cam Sanayii AS 2,230,000 499,096 89299D22
Turk Sise Ve Cam Fabrikalari 17,000,000 804,866 90099C22
1,590,185
UNITED KINGDOM - 5.5%
Barratt Developments PLC (b) 35,800 122,506 06818210
Bradstock Group PLC Ord. 325,000 626,350 10499192
British Borneo Petroleum 225,000 819,450 11099D22
British Gas PLC Ord. 400,000 1,736,020 11090199
British Petroleum PLC:
ADR 42,000 2,940,000 11088940
Ord. 58,000 339,738 11088910
Hanson Trust PLC Ord. 280,000 1,159,978 41135210
Hartstone Group PLC Ord. (b) 1,000,000 698,050 41722610
McAlpine (Alfred) Ord. 32,750 138,658 57999010
Next PLC (b) 300,000 1,019,259 64399999
Pentos Ltd. PLC:
Ord. 1,300,000 512,915 70967010
(right) (b) 1,733,333 52,607 70967093
Sedgwick Group 403,061 1,204,943 81482610
Takare PLC Ord. 730,000 2,846,985 94499792
Willis Coroon PLC Ord. (b) 800,000 2,792,200 97062410
17,009,659
TOTAL COMMON STOCKS
(Cost $245,896,968) 255,145,268
NONCONVERTIBLE PREFERRED STOCKS - 3.7%
AUSTRIA - 0.2%
Maculan Holding Ord. 7,500 722,402 55699594
GERMANY - 2.8%
Bayerische Motor Werke (BMW) AG 13,000 5,187,424 05528393
Glunz AG Ord. 10,000 1,494,559 37999392
Rheinmetal Berlin (b) 13,000 2,012,092 76299092
8,694,075
SHARES VALUE (NOTE 1)
ITALY - 0.7%
Banco di Napoli Ord. 2,000,000 $ 2,169,360 42799594
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $10,795,559) 11,585,837
REPURCHASE AGREEMENTS - 14.3%
MATURITY
AMOUNT
Investments in repurchase agreements
U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 44,342,385 44,338,000
TOTAL INVESTMENT IN SECURITIES - 100.0%
(Cost $301,030,527) $ 311,069,105
LEGEND
1. Non-income producing
2. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $1,804,925 or 0.6% of net
assets.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $410,911,614 and $158,485,509, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $3,777 for the period (see Note 4 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $301,030,527. Net unrealized appreciation aggregated
$10,038,578, of which $17,855,476 related to appreciated investment
securities and $7,816,898 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 2.4%
Basic Industries 13.9
Conglomerates 0.4
Construction & Real Estate 5.4
Durables 8.9
Energy 6.1
Finance 13.8
Health 0.9
Industrial Machinery & Equipment 7.9
Media & Leisure 1.0
Nondurables 0.7
Repurchase Agreements 14.3
Retail & Wholesale 7.2
Services 2.7
Technology 0.7
Transportation 5.6
Utilities 8.1
100.0%
EUROPE CAPITAL APPRECIATION
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $44,338,000) (cost $301,030,527) $ 311,069,105
(Notes 1 and 2) - See accompanying schedule
Cash 155,256
Receivable for investments sold 28,659,349
Receivable for fund shares sold 29,152,230
Dividends receivable 287,984
Prepaid expenses 22,611
TOTAL ASSETS 369,346,535
LIABILITIES
Payable for investments purchased $ 40,264,359
Payable for fund shares redeemed 3,827,957
Accrued management fee 172,757
Other payables and accrued expenses 254,860
TOTAL LIABILITIES 44,519,933
NET ASSETS $ 324,826,602
Net Assets consist of (Note 1):
Paid in capital $ 310,545,010
Undistributed net investment income 5,857
Accumulated undistributed net realized gain (loss) on investments 4,237,157
Net unrealized appreciation (depreciation) on investment securities 10,038,578
NET ASSETS, for 28,023,945 shares outstanding $ 324,826,602
NET ASSET VALUE, offering price and redemption price per share ($324,826,602 (divided by) 28,023,945 shares)(Note 4) $11.59
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
DECEMBER 21, 1993 (COMMENCEMENT OF OPERATIONS) TO
APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 731,931
Dividends
Interest 420,453
1,152,384
Less foreign taxes withheld (146,649
)
TOTAL INCOME 1,005,735
EXPENSES
Management fee (Note 4) $ 467,445
Transfer agent fees (Note 4) 379,074
Accounting fees and expenses 39,315
(Note 4)
Non-interested trustees' compensation 217
Custodian fees and expenses 43,840
Registration fees 58,339
Audit 11,455
Legal 43
Miscellaneous 150
TOTAL EXPENSES 999,878
NET INVESTMENT INCOME 5,857
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) 4,237,157
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on investment securities 10,038,578
NET GAIN (LOSS) 14,275,735
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 14,281,592
OTHER INFORMATION
Accounting fees paid to FSC $39,044
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C>
DECEMBER 21,
1993
(COMMENCEMENT
OF OPERATIONS) TO
APRIL 30, 1994
(UNAUDITED)
INCREASE (DECREASE) IN NET ASSETS
Operations $ 5,857
Net investment income
Net realized gain (loss) on investments 4,237,157
Change in net unrealized appreciation (depreciation) on investments 10,038,578
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 14,281,592
Share transactions 475,770,615
Net proceeds from sales of shares
Cost of shares redeemed (165,225,605)
Net increase (decrease) in net assets resulting from share transactions 310,545,010
TOTAL INCREASE (DECREASE) IN NET ASSETS 324,826,602
NET ASSETS
Beginning of period -
End of period (including undistributed net investment income of $5,857) $ 324,826,602
OTHER INFORMATION
Shares
Sold 42,886,188
Redeemed (14,862,243)
Net increase (decrease) 28,023,945
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C>
DECEMBER 21,
1993
(COMMENCEMENT
OF OPERATIONS) TO
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 10.00
Income from Investment Operations
Net investment income -
Net realized and unrealized gain (loss) on investments 1.59
Total from investment operations 1.59
Net asset value, end of period $ 11.59
TOTAL RETURN(dagger) 15.90%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 324,827
Ratio of expenses to average net assets 1.70%*
Ratio of net investment income to average net assets .01%*
Portfolio turnover rate 294%*
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
</TABLE>
JAPAN
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Japan Fund has a
3% sales charge, which has been waived since the fund's start on September
15, 1992 through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
JAPAN 5.81% 5.10% 41.26%
TOPIX Index 5.50% 9.24% 43.81%
Average Japanese Fund 8.31% 12.05% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year or since the fund
started on September 15, 1992. You can compare the fund's figures to the
performance of the TOPIX index - a broad measure of the Japanese stock
market's performance, similar to the Standard & Poor's 500 stock index
in the U.S. You can also compare the fund's performance to the average
Japanese fund which reflects the performance of seven funds with similar
objectives - in this case, a very small peer group - tracked by Lipper
Analytical Services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
JAPAN 5.10% 23.68%
TOPIX Index 9.24% 25.05%
Average Japanese Fund 12.05% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Japan (350) TOPIX
09/15/92 10000.00 10000.00
09/30/92 9940.00 9811.27
10/31/92 9840.00 9332.17
11/30/92 9940.00 9572.82
12/31/92 9960.00 9433.21
01/31/93 10050.00 9384.24
02/28/93 10620.00 9811.42
03/31/93 11840.00 11248.65
04/30/93 13440.00 13164.83
05/31/93 13820.00 13960.79
06/30/93 13000.00 13384.04
07/31/93 13870.00 14324.51
08/31/93 14110.00 14644.62
09/30/93 13730.00 13883.59
10/31/93 13350.00 13630.65
11/30/93 11600.00 11425.15
12/31/93 11997.00 11710.09
01/31/94 13412.66 13580.32
02/28/94 14043.00 14243.17
03/31/94 13805.33 13839.98
04/30/94 14125.66 14380.65
Let's say you invested $10,000 in Fidelity Japan Fund on its start date. By
April 30, 1994, it would have grown to $14,126 - a 41.26% increase on your
initial investment. That compares to $10,000 invested in the TOPIX index,
which would have grown to $14,381 over the same period - a 43.81% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
JAPAN
FUND TALK: THE MANAGER'S OVERVIEW
An interview with John Hickling, Portfolio Manager, and Shigeki Makino,
Tokyo-based Analyst, Fidelity Japan Fund
Q. JOHN, HOW DID THE FUND PERFORM?
J.H. Pretty well. For the six months and one year ended April 30, 1994, the
fund had total returns of 5.81% and 5.10%, respectively. Over the past six
months, the fund outperformed the TOPIX index - a measure of the overall
performance of the Japanese market - which returned 5.50%. However, over
the past year, it underperformed the TOPIX, which had a return of 9.24%.
The fund also underperformed the average Japan fund, which had returns of
8.31% for the past six months and 12.05% for the past year, according to
Lipper Analytical Services.
Q. HOW DO YOU RATE THE FUND'S PERFORMANCE OVER THE PAST SIX MONTHS?
S.M. The fund turned in a good performance, but it could have been better.
That's because the fund experienced tremendous cash volatility in February
of 1994 which was caused by political uncertainty. As a result, shareholder
inflows and outflows were exaggerated during this period.
Q. DESPITE THIS, YOU OUTPERFORMED THE INDEX DURING THIS SIX-MONTH PERIOD.
WHAT WAS BEHIND THIS?
J.H. The fund owned blue chip exporters that started turning in solid
results as the Japanese economy began improving in late 1993. Auto,
electronics and machinery exporters did well. They cut costs dramatically,
mostly to stay on top of the rising yen. Keep in mind, that during most of
the period the yen was very strong. As a result, Japan's exports were more
expensive in other countries, and thus, less competitive. Exporting
companies are considered cyclical stocks - stocks that tend to perform well
when the economy is improving and perform poorly when the economy is weak.
Q. WHAT SPECIFIC COMPANIES LOOKED GOOD?
J.H. We liked export companies that produced goods aimed at end users,
specifically consumer electronic companies, such as Sony and Matsushita.
These two companies started looking promising early in the fall of 1993
when the housing market in Japan improved and the sale of household goods,
including stereo and TV products, took off. On the international front,
both companies introduced successful new products over the past year. Sony
was pushing its mini-disk, which looks like a small floppy CD. The company
hopes this product will ultimately replace analog tapes. Matsushita
introduced flat vision, a process that allows the company to produce TV and
personal computer screens that are much thinner than currently used
screens. Flat vision is considered ideal for Japanese consumers because
home and office space there are at a premium. This product also looks as
though it will be successful outside of Japan.
Q. YOU MENTIONED THAT MANY JAPANESE COMPANIES CUT COSTS. WAS THERE ANY ONE
COMPANY THAT WAS A STANDOUT?
J.H. We were more impressed with Toyota than any other Japanese company in
terms of its cost-cutting measures. It took a number of steps that helped
it effectively reduce production costs. For example, the company stopped
making extras like rear view mirrors in a lot of colors and styles -
something that was considered to be high status in the '80s, but that made
cars more expensive to produce. Instead it started focusing on keeping
production simple and costs down, what Toyota calls "value engineering." In
fact, the company has been so successful in reducing expenses that it
projects the cost of developing its next automobile will be about 4% of the
cost of developing the Lexus, the company's luxury car introduced in 1989.
Q. LET'S TAKE A STEP BACK AND EXAMINE WHAT'S BEHIND JAPAN'S ECONOMIC
TURNAROUND IN LATE 1993 . . .
J.H. The Japanese economy, which had been depressed, started to pick up
around November in 1993. And, as we noted, many Japanese companies were
well placed to profit from the improving economy because they had taken
significant steps to reduce their costs over the past few years. I should
note that Japanese companies have been able to avoid cutting costs the
American way - through factory closings and layoffs - because in Japan most
workers' jobs have built-in wage flexibility. This means an employee's pay
is based largely on overtime and bonuses, both of which tend to drop off
when the economy falls. As a result, Japanese companies can trim expenses
without reducing head count. Japan's economy also experienced a boost from
tax cuts, an increase in the government's investment spending, dropping oil
prices (an important factor because Japan imports all of its oil), and low
interest rates.
Q. SO HOW ARE YOU FEELING NOW ABOUT THE JAPANESE ECONOMY?
S.M. You can look at Japan two ways: long term and short term. Long term,
Japan has some major problems, which are similar to those the United States
experienced in the late 1970s; it has a strong currency and is shifting
from a fully automated manufacturing economy to a service economy that
focuses on services like consulting and retail. We expect this shift to
happen over the next decade. Short term, as we pointed out, Japan is
experiencing a cyclical recovery.
Q. HAS THE LONG-TERM ECONOMIC OUTLOOK AFFECTED YOUR INVESTMENT DECISIONS?
S.M. Sure. While the fund focused mainly on the short-term cyclical
recovery, it owned several small innovative service companies that are well
placed for the long-term economic shift. One good example is Uni Charm, a
diaper company that's just made a thinner diaper. This company's timing is
good since Japan's birth rate has been picking up. Another notable company
called ADO Electronics specializes in personal computer hardware and
software. In Japan, not many people use PCs, but as the country moves to a
more service-oriented economy, many market watchers expect to see an
increase in PC use.
Q. IN HINDSIGHT, DO YOU REGRET ANY OF YOUR INVESTMENT DECISIONS?
S.M. Sure. If we had known the yen was going to go up to 100 to the dollar
by April of 1994, we would have made some different decisions. Most
importantly, we would have rid the fund of its cash holdings in dollars.
Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT GOING FORWARD OVER THE NEXT
YEAR?
J.H. We would be surprised if the Japanese economy improves dramatically.
However, if the economy remains the same or improves even slightly, and the
yen stays where it is, we expect many companies to profit from their
cost-cutting measures.
FUND FACTS
GOAL: to increase the value of the fund's shares
by investing mainly in Japanese securities
START DATE: September 15, 1992
SIZE: as of April 30, more than $353 million
MANAGER: John Hickling, since May 1993;
manager, Overseas, since January 1993; VIP:
Overseas, since January 1993; Fidelity Japan
Fund, since May 1993; previously managed
Fidelity Europe, International Growth and
Income, International Opportunities (now
Emerging Markets), and Pacific funds; joined
Fidelity in 1982
(checkmark)
JOHN HICKLING ON PICKING STOCKS IN JAPAN:
"I tend to be a bottom up investor. That means I usually
invest in specific companies I expect to perform well,
instead of certain sectors or industries. To make sound
decisions about companies, Shigeki and I try to visit as
many of them as we can.
"When I visit Japan, we try to meet with at least four
companies a day. At the end of the week, we come
away with a great idea of what's happening in the
country. These visits let us become totally immersed
in the companies we visit and gives us a great
overview of Japan's economic outlook. That's
because we're talking to the guys on the front line of
the economy - the people who make the decisions
about a company's inventory, production, purchasing
and costs - not an economics professor in an ivory
tower.
"In Japan, company meetings are extremely
important because there isn't as much written
information - or formal disclosure - as you have
access to in most western companies. Much like
other Asian countries, Japan is very much what I call
a "relationship market," and it also is a much more
formal society. You can't just walk into a company
cold and expect to get information. On the other
hand, if you've been meeting with a company for
years, Japanese business people tend to speak with
you freely. That's why it's important that Fidelity has
an established presence in Japan."
(bullet) On April 30, 1994, the fund had 9.5% in cash and
short-term investments, (after taking into account its
Nikkei Average holdings) as compared to 2.2% six
months ago. That's because the fund shifted to cash
as a defensive measure.
(bullet) The fund shifted out of financial stocks over the last
six months as their stock prices rose and many
investors sold them to take profits. On April 30, 1994,
the fund had 11.3% of its investments in finance,
compared to 23.5% six months ago.
(bullet) On April 30, 1994, the fund had a 12.0% position in
Nikkei stock average futures contracts, a type of
financial derivative that helps the fund obtain
exposure to the broad Japanese market. The fund
also had a 9.3% hedge position in currency contracts
on the yen, which protects against the possibility of a
yen decline.
JAPAN
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
Row: 1, Col: 1, Value: 21.0
Row: 1, Col: 2, Value: 0.8
Row: 1, Col: 3, Value: 76.5
United States 10.0%
Other 0.5%
Japan 89.5%
AS OF OCTOBER 31, 1993
United States 2.2%
Korea (South) 7.1%
Row: 1, Col: 1, Value: 2.2
Row: 1, Col: 2, Value: 7.1
Row: 1, Col: 3, Value: 90.7
Japan 90.7%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks and equity futures 89.9 96.8
Bonds 0.6 1.0
Short-term investments 9.5 2.2
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Matsushita Electric Industrial Co. Ltd. (Consumer Electronics)
2.9 2.6
Sony Corp.
(Consumer Electronics) 2.2 1.2
Daiwa Securities Ltd.
(Securities Industry) 2.0 3.2
Nomura Securities Co. Ltd.
(Securities Industry) 1.9 -
Honda Motor Co. Ltd.
(Autos, Tires, & Accessories) 1.3 -
Canon, Inc.
(Computers & Office Equipment) 1.2 -
TDK Corp.
(Electronics) 1.1 -
Toyota Motor Corp.
(Autos, Tires, & Accessories) 1.1 1.8
Nisshinbo Industries, Inc.
(Textiles & Apparel) 1.1 -
Hitachi Ltd.
(Electronics) 1.0 -
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Durables 21.3 12.4
Technology 12.9 10.0
Finance 11.0 23.5
Industrial Machinery & Equipment 6.8 11.7
Nondurables 4.6 3.0
Basic Industries 4.2 4.2
Retail & Wholesale 4.2 8.1
Construction & Real Estate 3.7 1.7
Transportation 3.0 1.4
Services 2.1 5.6
JAPAN
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 77.9%
SHARES VALUE (NOTE 1)
AEROSPACE & DEFENSE - 0.3%
SHIP BUILDING & REPAIR - 0.3%
Namura Shipbuilding (b) 157,000 $ 1,118,005 62999892
BASIC INDUSTRIES - 4.2%
CHEMICALS & PLASTICS - 2.0%
Denki Kagaku Kogyo 350,000 1,365,115 24899092
Gun-Ei Chemical Industries Co. Ltd.
Ord. 200,000 1,146,460 40280799
JSP Corp. 13,000 248,399 47399492
Kanegafuchi Chemical, Inc. 268,000 1,776,459 48418199
Tayca Corp. 256,000 1,182,546 94799392
Toyo Ink Manufacturing Co. Ltd. 200,000 1,276,470 89227499
6,995,449
IRON & STEEL - 0.6%
Araya Industrial 50,000 234,906 03899592
Kawasaki Steel Corp. 566,000 2,068,215 48636810
2,303,121
METALS & MINING - 0.5%
QNI Ltd. 200,000 228,896 74799B92
Teikoku Oil Co. 200,000 1,404,512 87999692
1,633,408
PACKAGING & CONTAINERS - 0.2%
Dai Nippon Shigyo Co. Ltd. 9,000 94,849 23599592
Yamamura Glass Co. Ltd. 100,000 789,914 98599592
884,763
PAPER & FOREST PRODUCTS - 0.9%
Chuetsu Pulp & Paper Co. Ltd. 283,000 1,223,650 17199092
Daio Paper Corp. 38,000 434,158 24299492
Indah Kiat Pulp & Paper (For. Reg.) 200,000 273,588 45499B23
Rengo Co. Ltd. 145,000 1,165,369 75999292
Tjiwa Kimia Pabrik Kertas 100,000 222,579 95499292
3,319,344
TOTAL BASIC INDUSTRIES 15,136,085
CONSTRUCTION & REAL ESTATE - 3.7%
BUILDING MATERIALS - 1.0%
Chichibu Cement Co. 36,000 421,944 16899010
Chofu Seisakusho Co. Ltd. 27,000 678,125 16999999
Dainichi Co. Ltd. 14,000 274,402 23499E22
Natoco Paint Co. Ltd. 7,000 227,519 63199C22
Nippon Sheet Glass Co. Ltd. 175,000 941,101 65461399
Tostem Corp. 30,000 1,019,403 89299110
3,562,494
CONSTRUCTION - 0.9%
Kaneshita Construction Co. Ltd. Ord. (b) 45,000 780,065 49099592
Sekisui House Ltd. 100,000 1,250,862 81607810
Subaru Enterprise Co. Ltd. Ord. 47,000 442,549 86499292
Taisei Rotec Corp. 80,000 782,429 87599492
3,255,905
ENGINEERING - 0.8%
C Cube Corporation 61,000 859,155 17499793
Nippon Denwa Shisetsu Ord. 127,800 2,076,923 68599292
2,936,078
REAL ESTATE - 1.0%
Hankyu Realty Co. Ltd. Ord. 48,000 402,324 41099292
Keihanshin Real Estate Co. Ltd. 52,000 435,339 48799692
Mitsubishi Estate Ltd. 150,000 1,743,327 60678310
Nichimo Corp. 221,000 979,514 68599492
3,560,504
TOTAL CONSTRUCTION & REAL ESTATE 13,314,981
SHARES VALUE (NOTE 1)
DURABLES - 21.3%
AUTOS, TIRES, & ACCESSORIES - 9.6%
Autobacs Seven Co. Ltd. 6,400 $ 819,462 05299392
Bridgestone Corp. 200,000 2,994,190 10844110
Calsonic Corp. 110,000 682,557 13199292
Daido Metal Co. 42,000 252,339 45599792
Daikin Manufacturing Co. Ltd. 60,000 933,714 24199192
Gastec Service, Inc. 15,000 107,111 37599292
Honda Motor Co. Ltd. 285,000 4,715,847 43812810
Kamei Corp. 91,000 1,174,136 48399792
Mazda Motor Corp. 430,000 2,236,185 57878592
Mitsubishi Motors Corp. 227,000 2,007,742 60899692
Nippon Cable Systems 77,000 910,076 65799392
Nissan Diesel Motor Co. Ord. 75,000 369,349 68099492
Nissan Motor Co. Ltd. Ord. 414,000 3,506,746 65474491
Sumitomo Rubber Industries 277,000 2,700,974 86699892
Suzuki Motor Corp. 213,000 2,832,167 86958592
Toyoda Gosei Co. 86,000 770,807 90399292
Toyota Motor Corp. 204,000 3,998,424 89399999
Yamaha Motor Co. Ltd. (b) 344,000 3,049,347 98456092
Yamakawa Industries Co. Ltd. 3,000 25,323 99199922
Yorozu Corp. 25,000 566,335 99199792
34,652,831
CONSUMER DURABLES - 0.3%
Sankyo Co. Ltd. 11,000 706,392 82299792
Super Tool Co. Ltd. 40,000 354,181 86899B22
1,060,573
CONSUMER ELECTRONICS - 6.8%
Daiichi Corp. Ord. 30,000 771,201 23599B92
Kenwood Corp. 40,000 346,302 49178692
Matsushita Electric Industrial Co. Ltd. 636,000 10,461,144 57687910
Orient Watch Industrial Co. 4,360 434,542 68899B22
Pioneer Electronic Corp. 70,000 1,799,468 72365710
Rinnai Corp. Ord. 25,000 768,246 76681999
Sharp Corp. 90,000 1,471,486 81989991
Sony Corp. 137,000 7,772,284 83569999
Zojirushi Thermos 44,000 689,058 91199492
24,513,731
HOME FURNISHINGS - 0.6%
Daiwa Rakuda Industry Co. Ltd. 11,000 253,521 51899392
Lilycolor Co. Ltd. 27,000 239,338 53299592
Matsuya Denki Co. Ltd. 34,000 338,225 57699890
Nitori Co. Ltd. 10,000 365,409 68599793
Nitori Co. Ltd. (warrants #2) (b) 500 88,016 68599794
Pricerite Group Ltd. 120,000 20,195 74199D22
Shimachu 23,000 962,770 82399010
2,267,474
TEXTILES & APPAREL - 4.0%
Atsugi Nylon Industrial 200,000 1,274,500 04984010
Daidoh Ltd. 29,000 264,208 56299292
Daiwabo Spinning Co. Ltd. 206,000 706,077 23699792
Kimuratan Co. Ltd. 137,000 770,481 49439999
Kurabo Industries Ltd. 450,000 1,865,952 50157710
Morishita Co. Ltd. 20,000 439,279 61799N22
Nippon Felt Co. Ltd. 64,000 450,704 65899592
Nisshinbo Industries, Inc. 377,000 3,973,113 65411310
Sangetsu Company Ltd. 55,000 2,015,168 80019999
Sotoh Co. Ltd. 32,000 457,008 83599592
Teijin 200,000 1,004,630 87999410
Toyobo Co. 250,000 1,110,510 90899392
14,331,630
TOTAL DURABLES 76,826,239
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
ENERGY - 1.5%
OIL & GAS - 1.5%
Cosmo Oil Co. Ltd. 340,000 $ 2,799,567 22199092
Hokuriku Gas Co. (b) 40,000 205,260 43899592
Showa Shell Sekiyu (b) 180,000 2,446,567 82510310
5,451,394
FINANCE - 11.0%
BANKS - 3.8%
Akita Bank 337,000 2,423,027 00999692
Bank of the Ryukyus 8,000 457,008 83499192
Bank of Saga Ord. 64,000 497,981 88299692
Eighteenth Bank 67,000 613,710 26899192
Higo Bank Ltd. Ord. 97,000 742,332 43299192
Kagoshima Bank Ltd. 216,000 1,595,588 48299592
Mitsubishi Trust & Banking 225,000 3,324,141 60699410
Mitsui Trust & Banking 40,000 433,370 60684699
Okinawa Bank 9,100 488,476 67899792
Sumitomo Trust & Banking Co. 225,000 3,102,532 86599310
13,678,165
CREDIT & OTHER FINANCE - 0.9%
Nichiei Co. Ltd. 7,700 686,349 68999392
Promise Co. Ltd. (b) 37,500 2,411,849 74499E22
3,098,198
INSURANCE - 1.4%
Dai-Tokyo Fire & Marine Insurance
Ord. 241,000 1,851,473 23399210
Sumitomo Marine and Fire 170,000 1,650,941 94599392
Tokio Marine & Fire Insurance Co. Ltd.
(The) 110,000 1,408,451 88909099
4,910,865
SECURITIES INDUSTRY - 4.9%
Boo Kook Securities Co. Ltd. 448 9,596 09899122
Daiwa Securities Ltd. 460,000 7,203,784 23499010
Nikko Securities 85,000 1,021,373 65399010
Nomura Securities Co. Ltd. 320,000 6,965,430 65536130
Osaka Securities Finance Co. Ltd. Ord. 130,000 883,483 68799192
Osaka Shoken Daiko Co. Ltd. 13,000 172,855 68799C22
Seoul Securities Co. (b) 1,000 17,581 83599P22
Tokyo Securities Co. Ltd. 93,000 761,184 89799C92
Wako Securities 81,000 797,794 93199010
17,833,080
TOTAL FINANCE 39,520,308
HEALTH - 0.4%
DRUGS & PHARMACEUTICALS - 0.3%
Fuji Rebio 48,000 553,137 35999410
Seikagaku Corp. 13,000 640,205 81599892
1,193,342
MEDICAL EQUIPMENT & SUPPLIES - 0.1%
Hitachi Medical Corp. Ord. 20,000 443,219 43999792
TOTAL HEALTH 1,636,561
INDUSTRIAL MACHINERY & EQUIPMENT - 6.8%
ELECTRICAL EQUIPMENT - 3.2%
Fanuc Ltd. 18,000 758,791 30729599
Hokuetsu Industries Co. Ltd. 47,000 201,369 43699392
ICOM, Inc. 117,000 1,878,361 44999A92
Keyence Corp. 18,700 1,989,166 49399292
Mitsubishi Electric Co. Ord. 400,000 2,387,472 60673220
Mori Seiki Co. Ord. 121,000 2,812,568 61799999
SHARES VALUE (NOTE 1)
Nifco, Inc. 70,000 $ 992,810 66099892
Yaesu Musen Co. Ltd. 33,000 529,794 98499F92
11,550,331
INDUSTRIAL MACHINERY & EQUIPMENT - 3.6%
AIDA Engineering Ltd. Ord. 70,000 517,778 00871210
Amada Ltd. (b) 82,000 904,560 02263110
Amadasonoike Co. Ltd. 109,000 826,653 02499492
Daewoo Heavy Industries Ltd. 3,000 41,971 23999492
Fuji Machine Manufacturing Co. Ltd.
Ord. 60,000 1,595,588 36099892
Hamada Printing Press Co. Ltd. 28,000 160,504 40699B22
Hitachi Const. Machinery Co. Ltd. 155,000 2,198,365 47199692
Kato Works Co. Ltd. 102,000 689,175 48699192
Kobe Diesel Co. 51,000 218,507 49999692
Kyokuto Kaihatsi Kogyo Co. Ltd. Ord. 25,000 637,742 74599692
Okuma Corp. 143,000 1,133,803 67999192
SMC Corp. 23,000 878,952 83199292
Shibuya Industries 24,000 288,388 88699092
Shintokogio Ltd. (b) 69,000 534,167 97199392
Star Micronics Co. Ltd. Ord. (b) 87,000 985,423 58999492
Tsugami Corp. 201,000 892,850 89853699
Zuiko Corp. 32,000 605,141 91399892
13,109,567
TOTAL INDUSTRIAL MACHINERY & EQUIPMENT 24,659,898
MEDIA & LEISURE - 2.0%
BROADCASTING - 0.2%
Asahi Broadcasting Corp. 5,000 709,150 04399292
LEISURE DURABLES & TOYS - 1.0%
Combi Corp. 5,000 65,990 20099522
Shimano Inc. (b) 30,000 788,929 82498099
Takara Co. Ltd. 59,000 691,520 87599892
Yamaha Corp. 160,000 1,922,584 98463499
3,469,023
RESTAURANTS - 0.8%
Joyfull Co. Ltd. (b) 21,000 459,175 49499F22
Kentucky Fried Chicken Japan 24,000 546,046 49199292
Ohsho Food Service Corp. 5,000 169,408 68899992
Royal Co. Ltd. 65,900 973,604 77999110
Yoshinoya D&C Co. Ltd. Ord. 33 611,051 98999192
2,759,284
TOTAL MEDIA & LEISURE 6,937,457
NONDURABLES - 4.6%
AGRICULTURE - 0.1%
Yonkyu Co. Ltd. 13,200 468,039 98699B22
BEVERAGES - 1.7%
Fuju Coca-Cola Bottling Co. Ltd. 1,000 16,744 36499D22
Hokkaido Coca-Cola Bottling Co. 16,000 296,267 43499C22
Kinki Coca-Cola Bottling Co. 40,000 795,824 49699392
Kirin Brewery Co. Ltd. 187,000 2,247,020 49712510
Mikuni Coca-Cola Bottling Co. 75,000 1,351,817 60241010
Nikka Whiskey Distilling Co. 44,000 468,039 65499E22
Sanyo Coca-Cola Bottling Co. 35,000 672,215 80399999
Shikoku Coca-Cola Bottling Co. Ltd. (b) 12,400 219,836 80099B22
6,067,762
FOODS - 1.9%
Chubu Suisan 185,000 1,056,831 17199A22
Ezaki Glicko Co. 180,000 1,932,433 30199492
Nippon Suisan Kaisha Ltd. (b) 450,000 2,007,783
Sonton Food Industry Co. Ltd. 41,600 610,500 83599692
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
NONDURABLES - CONTINUED
FOODS - CONTINUED
Toho Co. Ltd. Store 70,000 $ 944,548 94499B22
Toho Co. Ltd. Store (warrants) (b) 900 203,328 94499B23
6,755,423
HOUSEHOLD PRODUCTS - 0.9%
Nicca Chemical Co. Ltd. Ord. 11,000 162,514 65399D22
Pigeon Corp. 15,000 440,264 72099292
Uni Charm Corp. Ord. 90,000 2,570,669 90456910
3,173,447
TOTAL NONDURABLES 16,464,671
RETAIL & WHOLESALE - 4.1%
APPAREL STORES - 0.6%
Charle Co. Ltd. 51,000 1,230,671 15999392
Sagami Co. Ltd. 34,000 291,008 78699492
Xebio Co. Ltd. 15,000 540,727 98399192
2,062,406
APPLIANCE STORES - 0.2%
Japan CBM Corp. 23,000 724,909 47099B22
GENERAL MERCHANDISE STORES - 1.8%
Aoyama Trading Co. Ord. 15,000 694,376 03799092
Ito Yokado Co. Ltd. 50,000 2,634,689 46571410
Marui Co. Ltd. 137,000 2,266,916 60444310
Matsuzakaya Co. Ltd. 55,000 785,482 57699492
6,381,463
GROCERY STORES - 0.7%
Izumi Co. Ord. 42,000 1,009,357 46399292
Marukyo Corp. 30,000 1,063,725 57899792
Matsumoto, Inc. 17,000 514,035 57899A22
Yamae Hisano Co. 1,000 12,016 98899392
2,599,133
RETAIL & WHOLESALE, MISCELLANEOUS - 0.5%
Juel Verite Ohkubo Co. Ltd. 19,000 207,722 49499892
Senshukai Co. Ltd. 38,500 1,327,194 81719999
Tachibana Shokai Ltd. 37,000 364,424 88699192
1,899,340
TRADING COMPANIES - 0.3%
Kanematsu-Gosho Ltd. 251,000 1,236,087 48418999
Nam Sung Corp. (b) 1,200 20,057 63299D22
1,256,144
TOTAL RETAIL & WHOLESALE 14,923,395
SERVICES - 2.1%
LEASING & RENTAL - 0.8%
Nishio Rent All Co. Ltd. Ord. 24,000 685,512 68399692
Orix Corp. 60,000 2,287,009 68616710
2,972,521
PRINTING - 0.8%
Komori Corp. 79,000 2,131,981 50046299
Toppan Printing Co. Ltd. 60,000 768,246 89074799
2,900,227
SERVICES - 0.5%
Nippon Kanzai Co. Ltd. 16,800 736,334 68399192
Tasaki Shinju Co. Ltd.:
Ord. 57,000 887,028 87899392
(warrants) (b) 70 113,750 87899393
1,737,112
TOTAL SERVICES 7,609,860
SHARES VALUE (NOTE 1)
TECHNOLOGY - 12.9%
COMMUNICATIONS EQUIPMENT - 0.4%
Uniden 40,000 $ 1,339,506 90499392
COMPUTER SERVICES & SOFTWARE - 0.3%
Ines Corp. Ord. 97,000 1,241,998 45699192
COMPUTERS & OFFICE EQUIPMENT - 3.2%
Aseed Co. Ltd. 18,000 468,039 09699922
Canon, Inc. 270,000 4,387,864 13780199
Casio Computer Co. Ltd. Ord. 276,000 3,425,196 14761893
Fujitsu Ltd. 200,000 2,009,258 35959010
Katsuragawa Electric Co. 17,000 385,108 48799C92
Nakamichi Corp. 68,000 472,176 62899592
Nissho Electronics Corp. 18,000 287,206 68299892
11,434,847
ELECTRONIC INSTRUMENTS - 0.5%
Advantest Corp. 39,000 1,325,224 00799010
Dainippon Screen Manufacturing Co. 71,000 513,986 23699492
1,839,210
ELECTRONICS - 8.5%
ADO Electronic Industrial Co. 13,000 434,059 00699992
Alps Electric Co. Ltd. 93,000 1,300,699 02199292
Fujitsu Business Systems Ltd. 22,000 860,238 38199592
Futaba Corp. 60,000 2,369,743 36399292
Hitachi Ltd. 375,000 3,545,749 43357810
Hitachi Maxell Ltd. 115,000 2,321,974 43358990
Kinseki Ord. (b) 70,000 1,130,700 49799092
Kyocera Corporation 15,000 945,533 50155610
Nichicon Corp. 227,000 3,040,679 66199793
Ryoden Trading Co. Ltd. 135,000 1,223,284 78379999
Ryosan Co. Ltd. 40,000 1,201,615 78399999
Ryoyo Electro Corp. Ord. 71,000 2,069,930 74999999
Sanshin Electronic Co. Ltd. 32,000 441,249 80199892
Shinko Shoji 36,000 446,765 90699492
TDK Corp. 91,000 4,104,994 87235110
Tabai Espec Corp. 40,000 531,862 88199592
Taiyo Yuden Co. Ltd. 65,000 710,627 87404799
Tokyo Electron Ltd. 70,000 2,226,928 89499999
Toshiba Corp. 150,000 1,137,595 89149310
U-Shin Ltd. 43,000 334,581 91399293
Varitronix International Ltd. 180,000 256,320 95099792
30,635,124
TOTAL TECHNOLOGY 46,490,685
TRANSPORTATION - 3.0%
AIR TRANSPORTATION - 0.2%
Airport Facilities Co. Ltd. 15,000 212,745 01399692
Japan Airport Terminal 50,000 654,979 47299892
867,724
RAILROADS - 0.6%
East Japan Railway Ord. (b) 350 1,661,578 27399722
Hanshin Electric Railway Co. Ltd. 100,000 489,511 41899492
2,151,089
SHIPPING - 1.3%
Isewan Terminal Service Co. Ltd. 36,000 224,091 46499D22
Kawasaki Kisen Kaisha Ltd. 436,000 1,507,300 48639892
Mitsui OSK Lines 660,000 2,346,696 60799792
Shinwa Kaiun Kaisha Ltd. 193,000 703,338 98499092
Tokyo Kisen Co. Ltd. 12,000 93,844 88999999
4,875,269
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TRANSPORTATION - CONTINUED
TRUCKING & FREIGHT - 0.9%
Fukuyama Transporting Co. Ltd. (b) 50,000 $ 586,033 35959110
Hitachi Transport System Co. 79,000 902,591 43699992
Yamato Transport Co. Ltd. 140,000 1,737,413 99399892
3,226,037
TOTAL TRANSPORTATION 11,120,119
TOTAL COMMON STOCKS
(Cost $263,270,671) 281,209,658
CONVERTIBLE BONDS - 0.1%
MOODY'S RATINGS PRINCIPAL
AMOUNT (A)
RETAIL & WHOLESALE - 0.1%
GENERAL MERCHANDISE STORES - 0.1%
Aoyama Trading Co. Ltd. 0%,
9/30/97 - JPY 30,000,000 267,999 037990AB
RETAIL & WHOLESALE, MISCELLANEOUS - 0.0%
Laox Co. Ltd. 1.90%,
3/31/03 - JPY 10,000,000 110,608 539993AA
TOTAL RETAIL & WHOLESALE 378,607
TECHNOLOGY - 0.0%
COMMUNICATIONS EQUIPMENT - 0.0%
Uniden Corp. 1 3/5%,
3/30/01 - JPY 5,000,000 54,122 904993AA
TOTAL CONVERTIBLE BONDS
(Cost $393,425) 432,729
U.S. TREASURY OBLIGATIONS - 0.5%
U.S. Treasury Bill 0%,
7/7/94 (Cost $1,987,001) Aaa $ 2,000,000 1,986,180
REPURCHASE AGREEMENTS - 21.5%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 77,548,999 77,526,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $343,177,097) $ 361,154,567
FUTURES CONTRACTS
EXPIRATION UNDERLYING FACE UNREALIZED
DATE AMOUNT AT VALUE GAIN/(LOSS)
PURCHASED
435 Nikkei Stock
Average
Contracts June, 1994 $ 43,367,150 $ (737,150)
THE FACE VALUE OF FUTURES PURCHASED AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 12.0%
FORWARD FOREIGN CURRENCY CONTRACTS
SETTLEMENT UNREALIZED
DATE(S) VALUE GAIN/(LOSS)
CONTRACTS TO SELL
3,422,765,000 JPY 5/20/94 to
6/6/94 $ 33,764,097 $ (704,498)
(Receivable amount $33,059,599)
THE VALUE OF CONTRACTS TO SELL AS A PERCENTAGE OF TOTAL INVESTMENT IN
SECURITIES - 9.3%
CURRENCY ABBREVIATIONS
JPY - Japanese yen
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $310,629,292 and $163,704,479, respectively.
The market value of futures contracts opened and closed amounted to
$131,351,475 and $87,984,325, respectively.
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $5,604,000 and $2,478,200, respectively. The
weighted average interest rate was 3.99%. Interest expense includes $1,374
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $343,199,158. Net unrealized appreciation aggregated
$17,955,409, of which $20,877,655 related to appreciated investment
securities and $2,922,246 related to depreciated investment securities.
JAPAN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $77,526,000) (cost $343,177,097) $ 361,154,567
(Notes 1 and 2) - See accompanying schedule
Short foreign currency contracts $ (33,764,097
(Note 2) )
Contracts held, at value
Receivable for contracts held 33,059,599 (704,498
)
Cash 46,964
Receivable for investments sold 2,934,821
Receivable for fund shares sold 10,044,384
Dividends receivable 692,159
Interest receivable 222
Receivable for daily variation on futures contracts 43,500
TOTAL ASSETS 374,212,119
LIABILITIES
Payable for investments purchased 6,537,090
Payable for fund shares redeemed 13,640,329
Accrued management fee 189,683
Other payables and accrued expenses 218,465
TOTAL LIABILITIES 20,585,567
NET ASSETS $ 353,626,552
Net Assets consist of (Note 1)
Paid in capital $ 335,876,803
Accumulated net investment (loss) (1,350,074
)
Accumulated undistributed net realized gain (loss) on investments 2,564,001
Net unrealized appreciation (depreciation) on:
Investment securities 17,977,470
Foreign currency contracts (704,498
)
Futures contracts (737,150
)
NET ASSETS, for 25,864,513 shares outstanding $ 353,626,552
NET ASSET VALUE, offering price and redemption price per share ($353,626,552 (divided by) 25,864,513 shares) (Note 4)$13.67
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 914,013
Dividends
Interest 463,733
1,377,746
Less foreign taxes withheld (Note 1) (135,209
)
TOTAL INCOME 1,242,537
EXPENSES
Management fee (Note 4) $ 690,285
Basic fee
Performance adjustment (21,323
)
Transfer agent fees (Note 4) 638,085
Accounting fees and expenses 54,641
(Note 4)
Non-interested trustees' compensation 482
Custodian fees and expenses 67,690
Registration fees 25,469
Audit 12,420
Legal 1,240
Interest (Note 5) 1,374
Miscellaneous 518
TOTAL EXPENSES 1,470,881
NET INVESTMENT INCOME (LOSS) (228,344
)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 2,820,836
Foreign currency contracts 75,419
Futures contracts (280,800 2,615,455
)
Change in net unrealized appreciation (depreciation) on:
Investment securities 16,089,968
Foreign currency contracts (1,089,954
)
Futures contracts (737,150 14,262,864
)
NET GAIN (LOSS) 16,878,319
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 16,649,975
OTHER INFORMATION
Accounting fees paid to FSC $54,305
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations $ (228,344 $ (757,305
Net investment income (loss) ) )
Net realized gain (loss) on investments 2,615,455 4,923,789
Change in net unrealized appreciation (depreciation) on investments 14,262,864 2,318,483
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 16,649,975 6,484,967
Distributions to shareholders from net realized gains (2,956,715 -
)
Share transactions 688,437,764 473,221,868
Net proceeds from sales of shares
Reinvestment of distributions 2,893,589 -
Cost of shares redeemed (469,593,194 (364,464,963
) )
Net increase (decrease) in net assets resulting from share transactions 221,738,159 108,756,905
TOTAL INCREASE (DECREASE) IN NET ASSETS 235,431,419 115,241,872
NET ASSETS
Beginning of period 118,195,133 2,953,261
End of period (including accumulated net investment loss of $(1,350,074) and $(757,225),
respectively) $ 353,626,552 $ 118,195,133
OTHER INFORMATION
Shares
Sold 52,975,157 36,026,261
Issued in reinvestment of distributions 247,315 -
Redeemed (36,211,649 (27,472,802
) )
Net increase (decrease) 17,010,823 8,553,459
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
SIX MONTHS YEAR ENDED SEPTEMBER 15,
ENDED APRIL 30, OCTOBER 31, 1992
1994 1993 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
OCTOBER 31, 1992
SELECTED PER-SHARE DATA
Net asset value, beginning of period $ 13.35 $ 9.84 $ 10.00
Income from Investment Operations
Net investment income (.02)** (.09) -
Net realized and unrealized gain (loss)
on investments .73 3.60 (.16)
Total from investment operations .71 3.51 (.16)
Less Distributions
From net realized gain (.39) - -
Net asset value, end of period $ 13.67 $ 13.35 $ 9.84
TOTAL RETURN(dagger)(diamond) 5.81% 35.67% (1.60)%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 353,627 $ 118,195 $ 2,953
Ratio of expenses to average net assets 1.66%* 1.71% 2.00%*
Ratio of expenses to average net assets
before expense reductions 1.66%* 1.71% 3.59%*(diamond)
Ratio of net investment income to average
net assets (.26)%* (.77)% .03%*
Portfolio turnover rate 206%* 257% -%
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
** NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES
OUTSTANDING DURING THE PERIOD.
(diamond)EXPENSES LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. TOTAL RETURN
WOULD HAVE BEEN LOWER HAD THE LIMITATION NOT BEEN IN EFFECT.
</TABLE>
PACIFIC BASIN
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Pacific Basin
has a 3% sales charge which, beginning May 31, 1994, has been waived
through June 30, 1995.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 MONTH YEAR YEARS FUND
S
PACIFIC BASIN 8.56% 28.57% 30.68% 105.88%
PACIFIC BASIN
(INCL. 3% SALES CHARGE) 5.31% 24.71% 26.76% 99.70%
Morgan Stanley Pacific
Index 3.65% 12.57% -5.59% 77.79%
Average Pacific Region
Fund 2.35% 26.14% 57.51% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, five years, or
since the fund started on October 1, 1986. You can compare the fund's
figures to the performance of the Morgan Stanley Pacific index, a broad
measure of the performance of stocks in the Pacific region, weighted by
each country's market capitalization (or total value of its outstanding
shares). You can also compare the fund's performance to the average Pacific
region fund which reflects the performance of 41 funds with similar
objectives tracked by Lipper Analytical Services. These benchmarks include
reinvested dividends and capital gains, if any, and exclude the effects of
sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 PAST 5 LIFE OF
APRIL 30, 1994 YEAR YEARS FUND
PACIFIC BASIN 28.57% 5.50% 9.99%
PACIFIC BASIN
(INCL. 3% SALES CHARGE) 24.71% 4.86% 9.55%
Morgan Stanley Pacific 12.57% -1.14% 7.88%
Index
Average Pacific Region Fund 26.14% 9.72% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Pacific Basin (302) MS Pacific Index
10/01/86 9700.00 10000.00
10/31/86 9603.00 8862.00
11/30/86 10146.20 9399.07
12/31/86 10611.80 10088.05
01/31/87 12300.82 11598.87
02/28/87 12689.17 11904.22
03/31/87 13951.29 13131.82
04/30/87 15349.33 15062.31
05/31/87 15397.87 15062.31
06/30/87 14329.92 14116.01
07/31/87 14407.59 13782.70
08/31/87 15203.70 15420.34
09/30/87 14999.82 14974.05
10/31/87 12058.11 13345.52
11/30/87 12339.66 13875.39
12/31/87 13264.01 14088.57
01/31/88 13264.01 14793.36
02/29/88 13813.41 15831.10
03/31/88 14578.64 17064.31
04/30/88 15118.23 17280.12
05/31/88 14578.64 16620.65
06/30/88 13744.73 16055.73
07/31/88 13479.85 16785.08
08/31/88 13430.79 15542.64
09/30/88 13627.01 16142.75
10/31/88 13725.11 17469.62
11/30/88 14608.07 18911.35
12/31/88 14649.47 19018.54
01/31/89 14926.24 19193.41
02/28/89 15252.45 19438.67
03/31/89 14896.59 18821.29
04/30/89 15282.10 18832.42
05/31/89 14689.01 17780.12
06/30/89 14006.95 16987.42
07/31/89 15677.50 19192.02
08/31/89 14837.28 18004.64
09/30/89 16063.01 19105.05
10/31/89 15598.42 18593.72
11/30/89 16102.55 19478.89
12/31/89 16325.64 19500.06
01/31/90 15770.14 18396.74
02/28/90 14782.58 16611.35
03/31/90 13867.02 13619.98
04/30/90 13712.72 13711.64
05/31/90 15039.75 15616.28
06/30/90 15266.07 14987.13
07/31/90 15780.43 14873.33
08/31/90 13681.86 13454.50
09/30/90 11449.55 11345.09
10/31/90 13260.08 13796.09
11/30/90 12046.21 12266.22
12/31/90 11882.89 12788.36
01/31/91 12112.21 13186.92
02/28/91 13206.69 14812.56
03/31/91 13039.91 14005.66
04/30/91 13602.78 14365.60
05/31/91 13508.97 14309.99
06/30/91 13279.65 13374.87
07/31/91 13446.43 13825.95
08/31/91 12539.58 13124.61
09/30/91 13321.35 14157.05
10/31/91 13707.02 14759.53
11/30/91 13060.76 13809.99
12/31/91 13373.47 14233.78
01/31/92 13029.49 13682.29
02/29/92 12904.40 12724.00
03/31/92 12091.36 11513.90
04/30/92 11966.28 10986.10
05/31/92 12925.25 11842.95
06/30/92 12654.24 10911.67
07/31/92 12091.36 10759.99
08/31/92 12445.77 12234.05
09/30/92 12362.38 11953.73
10/31/92 12508.31 11531.67
11/30/92 12456.19 11749.15
12/31/92 12354.65 11614.67
01/31/93 12480.93 11593.05
02/28/93 13207.06 12155.13
03/31/93 14101.56 13623.52
04/30/93 15532.76 15794.04
05/31/93 16290.46 16253.52
06/30/93 15448.57 15987.05
07/31/93 16269.41 16932.23
08/31/93 17016.58 17433.05
09/30/93 17058.67 16781.05
10/31/93 18395.17 17153.59
11/30/93 17490.14 14733.35
12/31/93 20250.33 15760.40
01/31/94 20799.67 17584.75
02/28/94 21004.33 18038.08
03/31/94 19431.70 17042.36
04/30/94 19970.27 17779.27
Let's say you invested $10,000 in Fidelity Pacific Basin Fund on its start
date and paid the 3% sales charge. By April 30, 1994, it would have grown
to $19,970 - a 99.70% increase on your initial investment. That compares to
$10,000 invested in the Morgan Stanley Pacific index, which would have
grown to $17,779 over the same period - a 77.79% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
PACIFIC BASIN
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Simon Fraser,
Portfolio Manager of Pacific Basin Fund
Q. SIMON, HOW DID THE FUND PERFORM?
A. Quite well. For the six months and year ended April 30, the fund had
total returns of 8.56% and 28.57%, respectively. This beat the Morgan
Stanley Pacific index, which had total returns of 3.65% and 12.57% over the
same periods. It also outperformed the average Pacific region fund, which
was up 2.35% for six months and 26.14% for the year, according to Lipper
Analytical Services.
Q. WHY DID THE FUND OUTPERFORM THE INDEX?
A. Mostly because it owned more stocks in Southeast Asian countries than
the index did during the last two months of 1993. During these few months,
markets such as Hong Kong, Malaysia and Indonesia grew dramatically, rising
by as much as 25% in December alone. At the same time, the index was
heavily weighted in Japanese stocks, which performed poorly. While this
hurt the index at the time, it did mean it recovered sharply when Japan's
market started picking up in early 1994. Since the beginning of the year, I
have been playing catch-up in Japan. I've managed to double the fund's
investment in Japan - from about 20% at the beginning of January to
approximately 40% at the end of April.
Q. THE YEAR 1993 WAS A STELLAR ONE FOR SOUTHEAST ASIAN STOCKS. WHY DID THE
MARKET FALL THIS YEAR?
A. Before I answer that question, it's helpful to look at why 1993 was such
a strong year. First, with most of the world in or coming out of recession,
the Southeast Asian economies, with companies growing at 30% to 40%, stood
out as the great international buy. Plus, declining interest rates - which
often encourage investors to seek out stocks for better returns - in the
United States, Europe and Japan created huge cash flows into Southeast
Asia. Finally, investors could justify paying a higher price-to-earnings
ratio for these stocks because they were providing extraordinary returns.
This situation turned around early in 1994 when it became clear that
Southeast Asian stocks were overbought - meaning that they recently had
experienced an unexpectedly sharp price rise and were therefore vulnerable
to a price drop. In addition, the region no longer looked as attractive to
investors when other markets, such as Japan, started recovering. The stocks
in these other recovering markets were relatively cheap and had more
potential to grow than those in Southeast Asia. As a result of all of these
factors, the flow of money from the United States, Europe and Japan to
Southeast Asia lessened considerably.
Q. LET'S LOOK AT THE FLIP SIDE. AS YOU SAID, ABOUT THE SAME TIME THE
SOUTHEAST ASIAN MARKET DROPPED, JAPAN STARTED LOOKING GOOD . . .
A. That's right. Basically the performance of the Japanese market was the
inverse of the performance of the Southeast Asian market. During 1993 when
Southeast Asia was soaring, the Japanese economy was going through a very
severe recession, brought on by the government's decision to raise interest
rates to control inflation. The recession was compounded by a strong yen,
which made Japanese exports more expensive, and thus, less competitive in
other countries. To make the situation worse, other Asian countries were
producing goods that were equal in quality to Japanese products but less
expensive, and Japan was losing some market share. In early 1994, sentiment
toward Japan started changing when, as I just noted, investors began
looking for recovering markets. Many investors had very little money in
Japan at that time, so when they increased their positions, there was a
major inflow of capital into Japan. Since the beginning of the year, the
economy has been making a slow recovery.
Q. WHAT JAPANESE COMPANIES DID YOU LIKE?
A. Exporting companies were excellent performers, which is ironic because,
as I indicated a moment ago, a strong yen means that Japanese exports are
less competitive. However, these companies have been significantly reducing
costs. For much of the period electronic equipment manufacturer Sony was
one of my top stocks. It turned in a strong performance mostly because it
took some bold steps to cut costs. Other blue-chip exporters I still hold -
like Komatsu Ltd., a large machinery export business similar to
Caterpillar, and Fanuc Ltd. which exports machine tools and robots - also
did very well. Over the past month or so, I started switching my focus to
domestic cyclical stocks, such as steel, construction, textile and paper
companies. Japanese domestic cyclicals are stocks that tend to perform well
when the Japanese economy does well, or poorly when the country's economy
is weak. My view is that when Japanese investors come back to the market,
they'll buy these domestic cyclical companies. One cyclical stock that
looks strong going forward is Obayashi, a large Japanese construction
company. Nippon Kokan and Sumitomo Metal also look like good potential
recovery plays.
Q. OUTSIDE OF JAPAN, WHAT COUNTRIES OFFERED NOTEWORTHY INVESTMENT
OPPORTUNITIES?
A. At the end of the period, nearly all the stocks in the fund's top 10
were in Japan. However, some other countries in the top five were worth
noting, specifically Malaysia and Australia. Malaysia was a good play on
gaming (gaming - or gambling - is very popular there) as well as on
hardwood products manufacturers. These manufacturers experienced a real
demand for their wood, and consumers were willing to pay a high price for
it. While a strong environmental lobby made it difficult to export hardwood
logs directly, companies such as Golden Pharos exported doors and finished
furniture instead. I also found a number of attractive stocks in Australia,
where the economy had recovered sharply. Most of the top performers there
were commodities, such as gold and non-ferrous metal. Commodities are goods
that are traded in bulk, such as grains, foods or metals. One
top-performing Australian company was Broken Hill, a large producer of
steel and coal.
Q. THERE HAS BEEN A LOT OF TALK LATELY ABOUT DERIVATIVES. DO YOU USE THEM?
A. The fund uses currency contracts in the normal course of settling trades
and has the authority to use other kinds of derivatives.
Q. IN HINDSIGHT, DO YOU REGRET ANY OF YOUR INVESTMENT DECISIONS?
A. Sure. I wish I'd increased the fund's investments in Japan more quickly
in 1994 when that market began performing well. That said, I should note
that I try to make my decisions for the fund on a stock-by-stock basis. I
don't rush in and buy stocks indiscriminately in a specific country when it
looks like a good bet. For instance, I won't sell a stock in Malaysia that
I think is a good move for the long run simply to accommodate a short-term
market shift.
Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT OVER THE NEXT YEAR?
A. The outlook seems pretty good. The biggest story going forward is the
recovery in Japan. I expect to continue to increase the Japanese portion of
the fund - again on a stock-by-stock basis. I also think that the Southeast
Asian markets will stabilize as stock valuations return to attractive
levels. In fact, I expect to see superior growth in countries outside of
Japan if the fund chooses the right stocks.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in stocks in the
Pacific Basin region
START DATE: October 1, 1986
SIZE: as of April 30, 1994, more than $458 million
MANAGER: Simon Fraser, since May 1993;
also manages various funds for non-U.S.
investors
(checkmark)
SIMON FRASER ON THE RISKS AND REWARDS OF INVESTING IN
THE PACIFIC BASIN
"I firmly believe that the long-term outlook for the
Pacific Basin remains intact. In fact, I think it is an
especially exciting time for the region because it has
so much further to grow. When you look at countries
in the Pacific Basin, there are usually three stages of
growth. The first stage is developing an export
industry. The second stage happens when the
profits from exports provide a country with enough
money to improve its infrastructure, such as roads
and airports. The third stage occurs when people in
these countries become wealthy and have an
increased appetite for domestic consumer goods.
Right now, a number of Asian countries, including
the Philippines and Indonesia, have only gone
through the first stage and probably have a good
deal of growth ahead of them. Countries like
Malaysia and Thailand are right now seeing
domestic infrastructure development and an
increase in domestic consumption.
"As a result, I expect the region to experience
superior growth over the long term. However, in the
short run the market can be volatile, as we've seen
over the past few months. In my opinion, one benefit
of investing in Pacific Basin Fund is that its holdings
are diversified throughout Asia so it tends to be less
volatile than funds that invest in one Asian country.
In short, with a fund like this you may have more risk
than with a U.S. fund but less risk than with some
less diversified Asian funds."
(bullet) To keep the drop in the Southeast Asian market in
perspective, remember that the lowest point the
Hong Kong market hit in 1994 was equal to last
October's level. That's because the market was so
overbought - meaning that the market had recently
experienced an unexpectedly sharp price rise and
was therefore vulnerable to a price drop - in
November and December of 1993.
(bullet) Vietnam has been in the news a lot lately since the
United States reopened trade with the country. While
the fund sees Vietnam as an interesting investment
opportunity, it cannot directly buy stocks in Vietnam
because the country doesn't have a stock exchange.
PACIFIC BASIN
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United
States 4.1%
Australia 7.9%
Thailand 7.0%
Row: 1, Col: 1, Value: 4.1
Row: 1, Col: 2, Value: 7.0
Row: 1, Col: 3, Value: 5.8
Row: 1, Col: 4, Value: 6.0
Row: 1, Col: 5, Value: 11.8
Row: 1, Col: 6, Value: 3.7
Row: 1, Col: 7, Value: 38.0
Row: 1, Col: 8, Value: 6.7
Row: 1, Col: 9, Value: 8.9
Row: 1, Col: 10, Value: 7.9
Hong Kong 8.9%
Singapore 5.9%
Other 6.0%
Indonesia 6.7%
Malaysia 11.8%
Korea (South) 3.7%
Japan 38.0%
AS OF OCTOBER 31, 1993
Thailand 7.0%
Australia 5.4%
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 9.4
Row: 1, Col: 3, Value: 4.6
Row: 1, Col: 4, Value: 14.3
Row: 1, Col: 5, Value: 2.4
Row: 1, Col: 6, Value: 35.6
Row: 1, Col: 7, Value: 5.4
Row: 1, Col: 8, Value: 14.8
Row: 1, Col: 9, Value: 5.4
Singapore 9.4%
Hong Kong 14.8%
Other 5.7%
Indonesia 5.4%
Malaysia 14.3%
Korea (South) 2.4%
Japan 35.6%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 92.6 96.0
Bonds 3.3 2.9
Short-term investments 4.1 1.1
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Nomura Securities Co. Ltd.
(Japan, Securities Industry) 1.7 1.5
Obayashi Corp.
(Japan, Construction) 1.4 -
Komatsu Ltd. Ord.
(Japan, Industrial Machinery & Equipment)
1.2 -
Fanuc Ltd.
(Japan, Electrical Equipment) 1.1 -
Wing Tai Holdings Ltd.
(Singarpore, Textiles & Apparel) 1.1 0.8
Promise Co. Ltd.
(Japan, Credit & Other Finance) 1.1 0.4
Nippon Kokan
(Japan, Iron & Steel) 1.1 -
Sampoerna, Hanjaya Mandala
(Indonesia, Tobacco) 1.1 0.5
Sumitomo Metal Industries Ltd.
(Japan, Iron & Steel) 1.0 1.0
Kyushu Matsushita Electric Co. Ltd. (Japan, Electrical Equipment)
0.9 -
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 19.8 24.4
Construction & Real Estate 15.3 14.0
Basic Industries 12.9 8.8
Industrial Machinery & Equipment 9.6 5.8
Durables 6.9 9.6
Technology 5.1 6.5
Nondurables 5.1 4.4
Media & Leisure 3.8 4.8
Transportation 3.8 4.3
Retail & Wholesale 3.0 4.2
PACIFIC BASIN
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 92.1%
SHARES VALUE (NOTE 1)
AUSTRALIA - 7.7%
Accor Asia Pacific Ltd. 750,000 $ 590,125 00499N22
Amcor Ltd. 126,885 880,380 02341R10
Ampolex Ltd. Ord. 1,040,000 3,273,213 03212792
Broken Hill Proprietary Co. Ltd. (The) 325,034 3,952,446 05599810
Burns Philp & Co. 209,225 598,635 12239310
CRA Ltd. Ord. 41,000 486,247 12627210
CSR Ltd. 150,000 515,016 12639610
Coca-Cola Amatil Ltd. (b) 125,936 765,697 19108593
Comalco Ltd. 252,000 838,190 19983099
Commonwealth Bank of Australia (c) 324,886 1,910,253 20299492
Country Road Ltd. (b) 750,000 686,688 22299392
Fosters Brewing Group Ltd. 500,000 439,910 35025810
Gold Mines Kalgoorlie 479,390 435,492 38065310
Mount Burgess Gold Mining Co. (b) 634,000 90,700 62499922
National Foods Limited 7,977 11,012 63699292
Nine Network Australia Ltd. 350,000 1,326,881 68999792
Oil Search Ltd. 1,285,000 799,668 67799992
Pacific BBA Ltd. (c) 1,080,000 2,974,223 69399292
Parbury Ltd. (b) 100,000 44,349 69999392
Plutonic Resources Ltd. 658,125 3,389,449 72999192
QNI Ltd. 1,694,880 1,939,756 74799B92
Rothmans Holdings Ltd. Ord. (b) 344,500 1,626,378 77869910
Shomega Ltd. 715,000 987,079 82599M22
TNT Ltd. (b) 1,500,000 2,296,110 93599292
Vox Ltd. 1,010,000 505,717 92899B92
WD & HO Wills Holdings Ltd. 155,700 456,626
Western Mining Corp. Holdings Ltd. 322,237 1,613,473 95869410
Woodside Petroleum Ltd. 500,000 1,545,050 98022810
Woolworths Ltd. 306,098 680,939 98088892
35,659,702
GRAND CAYMAN - 0.0%
Sanzo Finance #5 (warrants) (b) 250 128,125 80599B22
HONG KONG - 8.1%
Allan International Holdings Ltd. 100,000 10,745 01699522
Amway Asia Pacific Ltd. (b) 2,000 75,750 03299H22
Applied International Holdings Ord. 2,000,000 647,280 03792310
Associates International Hotels Ltd. (b) 300,000 300,984 04599492
Benelux International Ltd. (b) 3,000,000 504,870 08199922
CDL Hotels International Ltd. 1,070,937 408,980 14999792
Chen Hsong Holdings Ltd. 1,230,000 752,354 16599292
Chimney Investments Ltd. (b) 8,302,000 1,655,087 16999B22
China Paint Holdings Ltd. (b) 2,000,000 245,960 17799392
Chow Sang Sang Holdings Ltd. 2,000,000 893,240 17399K92
Culturecom Holdings Ltd. 5,116,664 576,290 23099322
Culturecom Holdings Ltd. (warrants) (b) 1,523,332 48,518 23099324
Denway Investment Ltd. 1,000,000 178,650 24999C23
Dickson Concepts International 3,150,000 2,120,485 25399210
First Pacific Co. Ltd. 1,530,991 688,732 33699192
Fortei Holdings Ltd. 1,500,000 299,040 34999D22
Genting International 290,000 710,500 37245393
Grand Hotel Holdings Ltd. Class A 1,500,000 606,825 38599292
Grande Holdings Ltd. 246,000 334,383 38699622
Great Wall Electronics International Ltd. (b) 750,000 94,177 39199922
Great Wall Electronics International Ltd.
(warrants) (b) 75,000 2,194 39199923
Guangdong Investments Ltd. Ord. 2,000,000 1,126,260 40199492
Guangzhou Investment Co. Ltd. 4,750,000 1,352,800 40099G22
HKR International Ltd. 2,249,600 2,096,807 43999192
Henderson Investment Ltd. 1,100,000 818,807 42599422
Herald Holdings 1,000,000 204,540 42699892
Hong Kong Telecommunications Ltd. 1,000,000 1,915,930 43857991
International Bank of Asia Ltd. 250,000 103,565 45899E22
International Tak Cheung Holdings 3,898,149 1,513,885 46399892
JCG Holdings 130,000 82,884 46799792
SHARES VALUE (NOTE 1)
Jardine International Motor Corp. 918,000 $ 909,123 47499292
K. Wah International Holdings Ord. (b) 7,442,288 2,215,941 49099292
Kumagai Gumi (b) 1,000,000 1,061,530 50099210
Lam Soon Food Industries Ltd. 1,624,000 425,732 51299592
Lamex Holdings Ltd. 750,000 291,270 51399292
Le Saunda Holdings Ltd. (b) (c) 900,000 133,983 52199792
Leefung Asco Printers Holdings Ltd. (b) 2,387,000 423,334 52499692
M.C. Packaging 1,213,333 467,291 62399092
Mingly Corp. 1,500,000 287,385 60399C22
National Mutual Asia Ltd. (b) 3,500,000 1,778,385 63699592
Prod-Art Technology Holdings Ltd. 1,970,000 288,172 74499C92
S Megga International 2,000,000 582,540 99999C92
S Megga International (warrants) (b) 1,250,000 221,687 99999C93
SHK Hong Kong Industries Ltd. 330,000 41,438 90699B92
Shougang Concord International
Enterprises Co. (b) 2,000,000 627,860 99099L22
Sime Darby Hong Kong Ltd. 500,000 802,620 82899392
Siu Fung Ceramics Holdings Ltd. (b) 1,000,000 281,560 82999G22
South China Brokerage Co. Ltd. 530,000 124,184 83799E22
Star Paging International Holdings Ltd. 718,000 253,282 85599692
Stone Electronic Technology 200,000 60,196 86199B22
Sun Hung Kai Properties Ltd. 300,000 1,805,895 86676H10
Swire Pacific Class A 200,000 1,436,950 87079410
Tai Cheung Holdings Ltd. (b) 477,970 686,819 93499892
Wing Shan International 1,000,000 278,330 97499722
World Houseware Holdings Ltd. 435,000 202,727 98199A22
Yaohan International Caterers Ltd. (b) 542,000 175,413 99099692
Yips Hang Cheung Holdings Ltd. 1,524,000 434,035 99599592
Yue Yuen Industrial Holdings Ltd 4,000,000 932,080 98899D92
37,600,284
INDIA - 1.1%
Bombay Dyeing & Manu. Co. Ltd. GDR 35,000 315,000 09799H23
CESC Ltd. GDR (5 shares GDR &
2 warrants) (c) 19,000 969,000 15712820
Great Eastern Shipping Co. Ltd. GDR 25,000 218,750 39099823
Himalayan Fund NV IS (b) 60,000 900,000 43299792
Himalayan Fund NV IS:
Class C 15,000 108,750 43299794
(warrants) (b) 12,000 33,000 43299793
ITC Ltd. (b)(c):
GDS (1 share & 1/2 warrant) 21,000 388,500 45031810
(warrants) 7,000 52,500 45031811
Indo Gulf Fertilizer and Chemicals
GDR (c) 17,000 51,000 45577P10
Southern Petrochemical Industries GDS (b) 130,000 1,722,500 84361310
Tata Electric Companies GDR (c) 210 91,350 87656610
4,850,350
INDONESIA - 6.7%
Andayani Megah PT (b) 400,000 1,168,540 03399722
Argha Karya Prima PT (b) 150,000 243,445 01099992
Astra International PT (For. Reg.) 321,600 2,445,700 04699894
Bank Dagang Nas Indonesia PT 525,000 766,857 06099Q22
Bank International Indonesia Ord. (b) 760,000 2,202,609 06199B92
Bank Mashill Utama PT (For. Reg.) 276,500 403,878 06399L22
Bank Tiara Asia PT (b) 290,000 490,834 06599J22
Barito Pacific Timber PT (For. Reg.) (b) 240,000 957,091 06799F23
Ciputra Development PT (For. Reg.) 90,500 260,186 14999H22
Dharmala International Land 120,000 208,668 25399592
Duta Anggada Realty Ord. 332,500 743,932 26699192
Gadjah Tunniggal Ord. 242,000 389,954 36599292
Indah Kiat Pulp & Paper PT (For. Reg.) 2,195,000 3,002,628 45499B23
Indonesia Development Fund Ltd. (b) 70,000 595,000 71499722
Kabelmetal Indonesia PT (b) 280,000 766,044 84599B92
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
INDONESIA - CONTINUED
Kalbe Farma (b) 240,000 $ 1,290,960 48699992
Mayora Indah PT (c) 390,000 1,989,304 83099A92
Modern Photo Film PT (b) 442,500 1,744,118 61299792
Modernland Realty PT (b) 247,000 801,750 60999A92
Mulia Industrindo PT (For. Reg.) 225,000 479,936 62499B23
PT Inco 93,000 202,686 78999992
Pakuwon Jati Ord. 620,250 877,226 69599392
Panin Bank (For. Reg.) 1,300,000 1,989,299 69899823
Sampoerna, Hanjaya Mandala 643,000 4,919,702 82299892
Semen Cibinong PT (For. Reg.) (b) 180,000 1,001,606 81799693
Sucaco (b) 61,300 355,316 89399292
Tigaraksa Satria PT (b) 100,000 394,151 95099892
Unilever Indonesia 12,802 246,360 94399592
30,937,780
JAPAN - 38.0%
Acom Co. Ltd. (b) 35,000 1,844,283 00499M22
Aplus Co. Ltd. (b) 50,000 270,856 03899A92
Asahi Diamond Industrial Co. Ltd 103,000 1,602,876 04399010
Aucnet, Inc. (b) 22,000 1,235,103 05099592
Bandai Co. Ltd. 22,800 1,003,802 06099192
Bandai Co. Ltd. (warrants) (b) 100 182,500 06099193
Beltecno Corp. (b) 200 6,402 08099322
C. Itoh Fuel Co. Ltd. #3 (warrants) (b) 360 265,500 73299194
Casio Computer Co. Ltd. (warrants) (b) 200 395,000 14761897
Catena Corp. 95,000 3,087,757 14899792
Charle Co. Ltd. 26,000 627,401 15999392
Chiyoda Corporation 120,000 1,489,216 17098910
Chiyoda Fire & Marine Insurance Ltd. 200,000 1,315,868 17099010
Chuetsu Pulp & Paper Co. Ltd. 2,000 8,648 17199092
Chuo Trust & Banking 85,000 1,138,580 17499492
Citizens Watch Co. Ltd. (warrants) (b) 500 418,750 17560092
DIA Kensetsu Co. Ltd. 89,000 1,314,882 25299492
Daiki Co. Ltd. (b) 26,000 704,225 23999D22
Daito Trust Construction 80,000 2,127,450 24999492
Daiwa House Industry Co. Ltd.
(warrants) (b) 1,000 575,000 23406298
Denki Kogyo Co. 200,000 2,679,012 24899792
Denki Kogyo Co. Ltd. (warrants) (b) 2,500 356,341 24899793
Denyo Co. Ltd. (warrants) (b) 740 1,017,500 24999193
East Japan Railway Ord. (b) 430 2,041,367 27399722
Enix Corp. 24,000 1,160,642 29399A22
Fanuc Ltd. 125,000 5,269,379 30729599
Fuji Coca-Cola Bottling Co. Ltd. 27,000 452,083 36499D22
Fuji Electric Co. Ltd. (b) 850,000 4,169,207 36599492
Fuji Oil Co. (warrants) (b) 200 112,500 35999392
Fujisah Co. Ltd. (b) 14,700 288,122 36099C22
Fujitsu Kiden 15,000 237,861 39599092
Funai Consulting Co. Ltd. (b) 32,000 579,927 36499492
Fuso Pharmaceutical Industries Ltd. 97,000 874,176 36113299
Heiwa Corp. (b) 50,000 1,172,067 42399792
Hitachi Ltd. 300,000 2,836,599 43357810
Hitachi Ltd. ADR 26,800 2,542,650 43357850
Hitachi Transport System Co. 150,000 1,713,780 43699992
Hokko Chemical Industries 69,000 452,615 43599592
Hokuriku Seiyaku Ord. (b) 18,000 283,660 50699392
Honda Motor Co. Ltd. 200,000 3,309,366 43812810
Ichiken Co. (b) 28,000 383,335 73299092
Idec Izumi Corp. 1,000 8,470 45199392
Impact 21 Co. Ltd. 44,400 594,741 45299C22
Inui Tatemono Co. Ltd. (b) 27,000 372,304 46299892
Japan Associated Finance Co. 2,000 258,052 47099692
Kagoshima Bank Ltd. 150,000 1,108,047 48299592
Kawasaki Heavy Industries Ltd. 850,000 3,398,997 48639991
SHARES VALUE (NOTE 1)
Kawasaki Heavy Industries Ltd.
(warrants) (b) 1,000 $ 225,000 48639992
Kawasaki Kisen Kaisha Ltd. (b) 1,250,000 4,321,387 48639892
Kawasaki Steel #1 (warrants) (b) 400 10,000 48636893
Kinki Nippon Railway Co. Ltd. #3
(warrants) (b) 3,000 352,778 49570093
Koa Fire & Marine Insurance Co. Ltd. 11,000 76,273 49999010
Komatsu Limited Ord. 623,000 5,571,595 50045899
Kyocera Corp. (warrants) (b) 650 609,375 50155695
Kyushu Matsushita Electric Co. Ltd. 150,000 4,343,544 50199110
Mabuchi Motor Co. Ltd. 100 7,190 55409799
Marui Co. Ltd. 150,000 2,482,024 60444310
Marukyo Corp. 27,000 957,352 57899792
Matsushita Electric Works
(warrants) (b) 400 564,000 57688192
Matsuzakaya Co. Ltd. 113,200 1,616,665 57699492
Miroku Jyoho Service Co. Ltd. 14,000 330,937 60499D92
Mitsubishi Gas Chemical 680,000 3,060,768 60678899
Mitsubishi Heavy Industry 500,000 3,324,140 60699310
Mitsubishi Kasei Corp. (warrants) (b) 400 270,000
Mitsubishi Oil #5 (warrants) (b) 200 197,500 60799923
Mitsubishi Petrochemical Co. 170,000 1,138,580 60690910
Mitsubishi Rayon Co. Ltd. 200,000 770,216 60681010
Mitsui High-Tec, Inc. 80,000 1,977,741 61099092
Miyosha Oil & Fat Co. Ltd. Ord. 150,000 930,759 59999192
NEC Corp. 200,000 2,225,944 62999410
NGK Insulators Ltd. #2 (warrants) (b) 1,000 675,000 64350093
NSK Ltd. 200,000 1,341,476 63799192
Nakayama Steel Works Ltd. 128,000 810,637 62999310
Namura Shipbuilding (b) 320,000 2,278,736 62999892
Navix Line Ltd. (b) 500,000 1,718,705 63899592
Nichicon Corp. 160,000 2,143,210 66199793
Nichii Co. (warrants) (b) 2,000 210,954 65299195
Nippon Crane Works Ltd. (b) 100,000 324,042 68299492
Nippon Kokan 2,000,000 5,042,840 65457410
Nippon Shokubai Kagaku Kagyo 200,000 1,518,762 65499710
Nissan Chemical Industries Co. 155,000 989,264 65699692
Nissan Fire & Marine Insurance (b) 200,000 1,447,848 66699492
Nissei Build Kogyo Co. Ltd. (b) 41,000 573,426 67299792
Nissha Printing Co. Ltd. 80,000 2,166,847 66999492
Nisshin Steel Ltd. (b) 1,000,000 4,067,760 65476310
Nomura Securities Co. Ltd. 350,000 7,618,439 65536130
Obayashi Corp. 950,000 6,456,219 67090410
Oliver Corp. (warrants) (b) 2,000 256,566 68099193
Omron Corp. (warrants) (b) 900 450,000 68215192
Orient Finance Co. Ltd. 300,000 2,053,581 68616610
Promise Co. Ltd. (b) 78,500 5,048,804 74499E22
Sampei Construction Co. Ltd. (b) 3 36,977 79599G22
San-In Godo Bank 30,000 257,067 79999492
Sanken Electric Co. Ltd. (warrants) (b) 2,000 158,215 80099294
Sanwa Shutter Corp. #4 (warrants) (b) 1,500 393,750 80302493
Sanyo Coca-Cola Bottling Co. 55,000 1,056,338 80399999
Seiren Co. Ltd. (b) 175,000 1,827,045 81699692
Sekisui House (warrants) (b) 500 368,750 81607897
Senko Co. Ltd. (warrants) (b) 450 225,000 81799293
Shikoku Coca-Cola Bottling Co. Ltd. (b) 24,000 425,490 80099B22
Shinko Shoji 70,000 868,709 90699492
Sieno Transport (warrants) (b) 500 362,500 81605293
Sony Corp. 40,000 2,269,280 83569999
Sumitomo Metal Industries Ltd. 1,575,000 4,421,104 86599999
Sumitomo Sitix Corporation 120,000 1,654,684 68799692
Sun Wave Corp. #1 (warrants) (b) 1,000 725,000 86699B93
Super Daiei Co. Ltd. (b) 12,000 148,922 98499H22
Tada Corp. 80,000 472,766 87499592
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
JAPAN - CONTINUED
Taisei Corp. 250,000 $ 1,711,317 87346610
Tanseisha Co. Ltd. 30,000 449,128 87599292
Tasaki Shinju Co. Ord. 50,000 778,095 87899392
Techno Ryowa Ltd. (b) 22,000 626,219 95999892
Tohoku Telecom Construction (b) 20,000 281,690 89099792
Tokyo Electric Power Co., Inc. 20,000 636,265 88910710
Tokyo Kososushi Co. Ltd. 27,500 639,220 91599C22
Tokyo Securities Co. Ltd. 234,000 1,915,236 89799C92
Tomoku Co. Ltd. 43,000 335,851 90099892
Toshiba Chemical 16,000 182,803 90199792
Toshiba Corp. 550,000 4,171,183 89149310
Toyobo Co. 300,000 1,332,612 90899392
UBE Industries Ltd. 750,000 2,733,180 90261099
Valor Co. Ltd. (b) 6,000 130,602 92099B22
Yamaichi Securities 200,000 1,684,232 98499210
Yaohan Japan Corp. (warrants) (b) 200 125,000 98899894
Yokogawa Electric 100,000 940,609 98605299
Yorozu Corp. 10,000 226,534 99199792
Yoshinoya D&C Co. Ltd. Ord. 30 555,501 98999192
174,970,657
KOREA (SOUTH) - 3.6%
Boram Bank (b) 30,000 386,282 09999322
Boram Bank (New) 7,130 71,503 09999325
Boram Securities Co. Ltd. (b) 25,000 436,424 18599622
Cheil Investment Finance (b) 30,000 486,567 16399B22
Coryo Securities 100,000 1,819,982 22199822
Daewoo Electronics Co. Ltd. 41,200 586,604 23899C22
Daeyu Securities Co. Ltd. (b) 71,820 1,382,692 23399G22
Dong Ah Construction Industries Co. Ltd. 21,277 921,994 25799K22
Hanil Development Co. 35,020 693,723 41099822
Hanshin Securities Co. Ltd. 22,440 486,195 41899722
Kolon Industries, Inc. 9,882 379,277 50899292
Korean Air (b) 45,000 1,426,271 52299522
Miwon Co. Ltd. 20,600 515,191 61299693
Miwon Co. Ltd. (New) (b) 5,428 109,541 61299695
Nam Sung Corp. (b) 52,000 869,134 63299D22
Nong Shim Co. (b) 20,000 921,134 65599C22
Sam Yang (warrants) (b) 300 510,000 83999B23
Ssangyong Cement Co. (b) 19,712 671,140 76899392
Ssangyong Investment & Securities 41,200 1,050,786 77699522
Tong Yang Investment & Finance (b) 45,000 1,242,416 93899D22
Tong Yang Securities Co. Ltd. (b) 20,400 419,264 93999B22
Yukong Ltd. (b) 25,000 1,269,035 98899K22
16,655,155
MALAYSIA - 11.6%
Advance Synergy BHD 300,000 756,219 00799B22
Affin Holdings BHD 800,000 1,308,536 00899492
Aokam Perdana BHD (b) 100,000 970,946 01899792
Arab Malaysian Corp. 150,000 375,307 00499F92
Arab Malaysian Development BHD 100,000 99,709 00599622
Bandar Raya Development BHD 2,000 3,062 06000210
Berjaya Leisure BHD 350,000 394,726 08410592
Berjaya Leisure BHD (warrants) (b) 265,000 1 08410594
Berjaya Simger BHD (b) 100,000 156,845 08499A92
Berjaya Sports Toto BHD (b) 100,000 179,252 08499E22
Bolton Properties BHD 768,000 912,031 09799592
CHG Industries BHD 285,000 941,911 16699892
CI Holdings BHD 5,000 16,711 12099492
Commerce Asset (warrants) (b) 66,666 89,127 20099493
Consolidated Plantations BHD 590,000 806,406 20999510
Development & Commercial Bank 388,000 818,657 25199692
SHARES VALUE (NOTE 1)
Diversified Resources BHD (Malaysia) (b) 200,000 $ 586,302 25499F22
Dunlop Estates BHD 500,000 1,493,765 26599392
Ekovest BHD 200,000 873,852 28299922
Ekran Berhad Ord. (b) 200,000 1,695,422 28299792
Faber Group BHD 100,000 137,426 30299892
Genting BHD 125,000 1,400,404 37245210
Golden Frontier BHD 200,000 336,096 38299E22
Golden Pharos BHD (b) 1,100,000 3,676,530 38299D22
Golden Plus Holdings BHD (b) 250,000 1,148,330 38399492
Golden Plus Holdings BHD A (New) 83,333 382,775 38399493
Hong Leong Properties BHD 235,000 329,973 43899L22
Hume Industries Malay BHD 280,000 1,019,494 44599692
Idris Hydraulic Malaysia BHD (b) 600,000 1,165,134 45199B92
Kemayan Oil Palm BHD 100,000 185,227 48999H22
Kian Joo Can Factory BHD (b) 202,000 754,351 48899392
Kim Hin Industry BHD 75,000 437,645 49499C92
Kuala Lumpur Kepong BHD Ord. 352,000 676,973 49399792
Kumpulan Emas BHD (b) 300,000 423,483 52399493
Land & General BHD 350,000 1,189,408 51499693
Linatex Process Rubber BHD 100,000 541,489 53299B22
MBF Holdings BHD Class A (b) 125,000 78,890 61799L24
Magnum Corp. BHD 250,500 589,346 55999392
Malaysian Banking (b) 60,500 341,157 56090499
Malaysian Helicopter Services BHD 100,000 440,660 56099M22
Malaysian Resources Corp. BHD 1,500,000 3,052,875 56099793
Mega First Corp. BHD 177,000 216,806 59399F22
Mercury Industry BHD (b) 96,000 215,102 58999A22
Minho BHD 500,000 961,610 60399822
Mycom BHD 250,000 583,502 63199892
Nylex Malaysia BHD 5,000 11,110 69199592
Olympia Industries BHD 300,000 412,278 68199D92
Pacific Chemicals BHD (b) 178,000 1,243,035 69599H22
Pan Malaysian Cement Works 113,000 177,235 69834099
Pengkalen Holdings BHD 256,000 401,523 70799322
Public Finance BHD:
(For. Reg.) 235,000 368,586 87799994
(Loc. Reg.) 354,000 515,573 87799992
Resorts World BHD 250,000 1,400,402 76199592
Rothmans Pallmall Malaysia Ord. 100,000 653,522 77869810
Sedap Food & Confectionary BHD 23,000 120,248 81599A22
Sungei Way Holdings (b) 478,000 2,088,506 86799892
Super Enterprise Holdings BHD 126,000 192,920 98999Q22
Syarikat Pembinaan Setia BHD 371,000 699,661 93599E22
Tan & Tan Development BHD (b) 900,000 1,075,509 89699B22
Tanjong PLC 415,000 2,014,713 87599993
Technology Resources 140,000 601,240 93699692
Telekom Malaysia BHD 455,000 3,398,313 94099892
Time Engineering BHD (b) 122,000 384,981 93099592
Tongkah Holdings BHD 178,000 327,045 94999C92
Tongkah Holdings BHD:
(rights 5/12/94) 133,333 64,729 94999C97
(rights 5/13/94) 80,000 50,190 94999C95
United Engineers Malaysia BHD 300,000 1,310,778 93099692
YTL Corporation (b) 240,000 1,102,397
Yangtzekiang BHD 250,000 1,867,205 98499G22
53,245,172
NEW ZEALAND - 1.1%
Brierley Investments Ltd. 2,153,738 1,629,066 10901410
Carter Holt Harvey Ltd. 1,342,263 2,859,839 14699292
Ceramco Corp. Ltd. (b) 200,000 652,462 15699692
Ubix Business Machines Ltd. 100,000 138,576 90299J22
5,279,943
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
PAKISTAN - 0.7%
Adamjee Insurance 99,600 $ 1,018,208 00599492
Bank of Punjab (b) 42,900 115,264 79899A92
National Development Leasing Corp. 361,400 805,228 63599492
Pakistan International Airway (b) 247,500 170,300 69599B92
Pakistan State Oil 108,720 1,193,375 34799292
Pakistan Suzuki Motors (b) 26,000 39,827 43499A92
3,342,202
PHILIPPINES - 1.0%
Ayala Corp. CLass B 200,000 268,748 05499092
Ayala Land, Inc. Class B 1,324,400 1,683,458 05499392
Filinvest Land, Inc. Ord. (b) 1,875,000 510,712 31699J22
JG Summit Holdings, Inc. Class B (b) 2,450,000 978,750 46615292
Manila Mining Corp. Class B 14,025,000 132,396 59399C22
Universal Robina Corp. 1,270,500 899,755 91399F22
4,473,819
SINGAPORE - 5.5%
Bukit Sembawang Estates 25,000 434,111 12099892
Clipsal Industries Holdings Ltd. (b) 558,000 3,236,400 18899192
Clipsal Industries Holdings Ltd.
(warrants) (b) 41,600 87,360 18899193
Courts Sing Ltd. (b) 500,000 755,675 22299992
Falmac Ltd. 150,000 94,057 30699722
First Capital Corp. Ltd. (b) 400,015 1,376,348 31999792
Fraser & Neave (warrants) (b) 100,159 531,425 35499393
Hotel Properties Ltd. 760,000 1,148,626 44199492
Hotel Properties Ltd. (warrants) (b) 190,000 171,072 44199494
Informatics Holdings Ltd. 226,000 261,624 45699D22
Jurong Shipyard Ltd. 207,000 1,983,600 48254699
Metro Holdings Ltd. 85,000 251,463 59162410
Overseas Chinese Banking Corp. (b) 469,693 4,289,434 68999610
Pacific Can Investment Holdings (b) 200,000 276,546 69499C22
Pacific Can Investment Holdings
(warrants) (b) 60,000 52,672 69499C24
Parkway Holding (b) 1,500,000 3,067,725 70199192
Parkway Holding (warrants) (b) 550,000 654,384 70199193
Pentex Schweizer Circuits Ltd. 125,000 188,919 70999222
Singapore Computer Systems Ltd. 522,000 453,211 83899A92
United Overseas Bank (warrants) (b) 168,750 689,151 91199E92
Wing Tai Holdings Ltd. (b) 2,984,000 5,143,163 97499392
25,146,966
SRI LANKA - 1.1%
Associated Motorways Ltd. 13,500 50,032 04599H22
Ceylon Tea Services Ltd. 100,000 631,186 15799B22
Development Co. of Ceylon 214,933 2,172,412 25199C92
Distillery Co. of Sri Lanka (b) 2,542,000 521,898 25499D92
John Keells Holdings Ltd. GDR (c) 70,000 927,500 48730210
Kelani Tyres Ltd. (Loc. Reg.) 233,000 236,728 48799N22
National Development Bank 47,000 331,544 63599B22
4,871,300
TAIWAN (FREE CHINA) - 0.1%
R.O.C. Taiwan Fund (SBI) 52,500 525,000 74965110
THAILAND - 5.8%
Asia Fiber Co. (For. Reg.) 400,000 401,112 04499592
Asia Securities Trading Co. (For. Reg.) 750,000 2,680,702 04599D23
Bangkok Metropolitan Bank Public
(For. Reg.) 1,200,000 929,304 06199E23
Bangkok Steel Industry Co. Ltd.
(For. Reg.) 250,000 600,675 06099P23
SHARES VALUE (NOTE 1)
Bank of Ayudhya (For. Reg.) 120,000 $ 374,106 05999998
Dhana Siam Finance & Securities
(For. Reg.) 12,000 261,160 24299593
Finance One Public Co. (For. Reg.) 45,000 632,646 31799E93
First Bangkok City Bank (For. 31799E96Reg.) 790,000 556,887 31899D93
Five Star Property Co. Ltd. (For. Reg.) 200,000 857,824 33899223
General Finance & Securities Public
Co. Ltd. (For. Reg.) 100,000 897,538 36999693
Goodyear (Thailand) Ltd. 23,600 487,371 38399893
International Engineering (For. Reg.) 27,000 621,922 46299A93
Kiatnakin Finance & Securities
(For. Reg.) 19,000 295,790 49699794
Krisda Mahanakorn Company
(For. Reg.) (b) 400,000 1,191,420 50199D93
Land & House (For. Reg.) 105,000 2,393,566 51499393
MDX Co. Ltd. (For. Reg.) 242,000 1,460,843 55699293
National Finance & Securities Co.
(For. Reg.) 94,500 1,215,966 63199593
Padaeng Industry Co. Ltd. (For. Reg.) 470,000 802,619 69199922
Phatra Thanakit Public Co. Ltd.
(For. Reg.) 15,100 513,328 71799593
Pizza Co. (Thailand) Ltd. (For. Reg.) 150,000 416,997 72599593
Ruang Khao Unit Trust (For. Reg.) (b) 2,282,200 1,427,516 77399393
Saha Union Corp. (For. Reg.) 401,363 510,072 78699594
Shinawatra Computer & Communication
Co. (For. Reg.) (b) 50,000 1,151,707 94799193
Siam Cement (For. Reg.) 15,000 652,899 78799010
Siam City Bank Ltd. (For. Reg.) 1,850,000 1,377,584 81199593
Telecomasia Corp. Pub. Ltd. (For. Reg.) 150,000 595,711 87928D93
Thai Farmers Bank 146,000 753,773 90199010
Thai German Ceramic Industry
(For. Reg.) 200,000 1,294,678 94699893
Thai Military Bank (For. Reg.) 320,000 902,304 90199989
Thai President Food Co. (For. Reg.) 30,500 341,580 90299992
United Foods Co. Ltd. (For. Reg.) 114,200 258,515 91699B93
26,858,115
TOTAL COMMON STOCKS
(Cost $370,692,510) 424,544,570
PREFERRED STOCKS - 0.5%
CONVERTIBLE PREFERRED STOCKS - 0.2%
AUSTRALIA - 0.2%
Ampolex Ltd. 8% 300,000 982,821 03210593
NONCONVERTIBLE PREFERRED STOCKS - 0.3%
KOREA (SOUTH) - 0.0%
Dongbu Construction (b) 10,910 140,478 25799M23
SINGAPORE - 0.3%
Thai Prime Fund (b) 75,000 1,125,000 92599B23
TOTAL NONCONVERTIBLE PREFERRED STOCKS 1,265,478
TOTAL PREFERRED STOCKS
(Cost $2,070,737) 2,248,299
CORPORATE BONDS - 3.3%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
CONVERTIBLE BONDS - 3.2%
GRAND CAYMAN - 0.7%
Bangkok Land euro 4 1/2%,
10/13/03 (c) - $ 900,000 $ 796,500 06099LAA
Henderson Capital euro 4%,
10/27/96 (c) - 1,500,000 1,417,500 4247309A
JG Summit Cayman Ltd. euro
3 1/2%, 12/23/03 - 1,000,000 880,000 46699CAA
3,094,000
HONG KONG - 0.8%
Hon Kwok Land Treasury Ltd.
euro 4 7/8%, 2/15/00 - 1,000,000 850,000 43899JAA
Lai Fung O/S Finance Ltd.
euro 5 1/4%, 2/5/98 (d) - 500,000 410,000 50699CAA
Sino Land euro 5%,
10/21/00 (c) - 1,000,000 1,055,000 8293109A
Stelux Holdings Ltd. 1 3/4%,
3/31/01 - CHF 2,000,000 1,161,672 858991AA
3,476,672
INDIA - 0.2%
Jindal Strip euro 4 1/4%,
3/31/99 (c) - 280,000 277,200 642994AA
Scici Ltd. euro 3 1/2%,
4/1/04 (c) - 640,000 710,400 79599KAA
Sterlite Industry India Ltd.
3 1/2%, 6/30/99 (c) - 125,000 119,375 859737AA
1,106,975
KOREA (SOUTH) - 0.1%
Ssangyong Oil Refining euro
3 3/4%, 12/31/08 - 550,000 643,500 78099AAA
MALAYSIA - 0.2%
United Engineers Malaysia BHD
2%, 3/1/04 (c) - 880,000 814,000 910213AA
PHILIPPINES - 0.0%
Benpress Holdings Corp.
4 1/5%, 12/31/49 (c) - 43,000 137,750 082300AA
THAILAND - 1.2%
Asia Credit 3 3/4%,
11/17/03 (c) - 505,000 486,062 044909AA
Hemaraj Land DV euro
3 1/2%, 9/9/03 - 500,000 412,500 42399BAA
Juldis Development Co. Ltd.
euro 4 1/4%, 12/22/03 - 700,000 567,000 48199AAA
Phatra Thanakit Public Co. Ltd.
euro 3 1/2%, 12/13/03 - 1,100,000 1,130,250 717995AA
Thai CN Chemical euro
3 3/4%, 10/25/03 - 1,250,000 1,165,625 94299GAA
Wattachak Co. Ltd. euro
3 1/2%, 12/6/03 - 1,800,000 1,962,000 94299HAA
5,723,437
TOTAL CONVERTIBLE BONDS 14,996,334
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
NONCONVERTIBLE BONDS - 0.1%
MALAYSIA - 0.0%
Berjaya Leisure BHD 5%,
1/18/99 - MYR 265,000 $ 89,066 0841059A
United Engineers Malaysia BHD
4%, 3/9/98 - MYR 250,000 84,024 9102139E
173,090
SINGAPORE - 0.1%
Hotel Properties Ltd. 3 1/2%,
10/15/98 - SGD 304,000 171,072 441994AA
Pacific Can Investment Holdings
2 1/2%, 4/30/99 - SGD 60,000 34,730 69499CAA
205,802
THAILAND - 0.0%
Finance One Public Co.
3 3/4%, 2/7/01 - THB 818 32,486 31799EAA
TOTAL NONCONVERTIBLE BONDS 411,378
TOTAL CORPORATE BONDS
(Cost $16,280,708) 15,407,712
REPURCHASE AGREEMENTS - 4.1%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 18,792,573 18,787,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $407,830,955) $ 460,987,581
CURRENCY ABBREVIATIONS
MYR - Malaysian ringgit
SGD - Singapore dollar
CHF - Swiss franc
THB - Thai baht
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $15,301,400 or 3.3% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $214,231,758 and $293,216,442, respectively.
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $33,549,000 and $11,562,000, respectively. The
weighted average interest rate was 3.54%. Interest expense includes $28,400
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $407,913,063. Net unrealized appreciation aggregated
$53,074,518, of which $80,268,200 related to appreciated investment
securities and $27,193,682 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 0.9%
Basic Industries 12.9
Conglomerates 0.4
Construction & Real Estate 15.3
Durables 6.9
Energy 2.2
Finance 19.8
Health 0.9
Industrial Machinery & Equipment 9.6
Media & Leisure 3.8
Nondurables 5.1
Precious Metals 1.2
Repurchase Agreements 4.1
Retail & Wholesale 3.0
Services 2.3
Technology 5.1
Transportation 3.8
Utilities 2.7
100.0%
PACIFIC BASIN
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $18,787,000) (cost $407,830,955) $ 460,987,581
(Notes 1 and 2) - See accompanying schedule
Cash 747
Receivable for investments sold 4,419,155
Receivable for fund shares sold 2,104,216
Dividends receivable 1,231,138
Interest receivable 233,370
TOTAL ASSETS 468,976,207
LIABILITIES
Payable for investments purchased $ 4,638,499
Payable for fund shares redeemed 4,598,040
Accrued management fee 324,745
Other payables and accrued expenses 549,165
TOTAL LIABILITIES 10,110,449
NET ASSETS $ 458,865,758
Net Assets consist of (Note 1):
Paid in capital $ 344,449,011
Distributions in excess of net investment income (3,670,797
)
Accumulated undistributed net realized gain (loss) on investments 64,930,918
Net unrealized appreciation (depreciation) on investment securities 53,156,626
NET ASSETS, for 24,751,550 shares outstanding $ 458,865,758
NET ASSET VALUE and redemption price per share ($458,865,758 (divided by) 24,751,550 shares) (Note 4) $18.54
Maximum offering price per share (100/97.00 of $18.54) (Note 4) $19.11
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 3,342,621
Dividends
Interest 497,131
3,839,752
Less foreign taxes withheld (Note 1) (414,712
)
TOTAL INCOME 3,425,040
EXPENSES
Management fee (Note 4) $ 1,909,523
Basic fee
Performance adjustment 187,978
Transfer agent fees (Note 4) 1,121,541
Accounting fees and expenses 148,341
(Note 4)
Non-interested trustees' compensation 1,517
Custodian fees and expenses 404,396
Registration fees 54,083
Audit 21,135
Legal 3,553
Interest (Note 5) 28,400
Miscellaneous 2,331
TOTAL EXPENSES 3,882,798
NET INVESTMENT INCOME (LOSS) (457,758
)
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) 64,927,705
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on investment securities (30,437,384
)
NET GAIN (LOSS) 34,490,321
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ 34,032,563
OTHER INFORMATION $1,606,639
Sales charges paid to FDC (Note 4)
Deferred sales charges withheld by $20,820
FDC (Note 4)
Accounting fees paid to FSC $146,762
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
Operations $ (457,758 $ 382,796
Net investment income (loss) )
Net realized gain (loss) on investments 64,927,705 17,437,804
Change in net unrealized appreciation (depreciation) on investments (30,437,384 80,580,451
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS 34,032,563 98,401,051
Distributions to shareholders: (1,630,288 (1,023,177
From net investment income ) )
In excess of net investment income (1,576,094 -
)
From net realized gain (6,660,054 -
)
TOTAL DISTRIBUTIONS (9,866,436 (1,023,177
) )
Share transactions 486,295,014 607,340,439
Net proceeds from sales of shares
Reinvestment of distributions 9,613,066 1,000,772
Cost of shares redeemed (554,741,747 (328,462,549
) )
Net increase (decrease) in net assets resulting from share transactions (58,833,667 279,878,662
)
TOTAL INCREASE (DECREASE) IN NET ASSETS (34,667,540 377,256,536
)
NET ASSETS
Beginning of period 493,533,298 116,276,762
End of period (including distributions in excess of net investment income of $(3,670,797)
and $(2,348,481), $ 458,865,758 $ 493,533,298
respectively)
OTHER INFORMATION
Shares
Sold 26,519,752 40,739,229
Issued in reinvestment of distributions 566,137 87,252
Redeemed (30,567,796 (22,282,360
) )
Net increase (decrease) (3,481,907 18,544,121
)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31,
APRIL 30, 1994
(UNAUDITED)
SELECTED PER-SHARE DATA 1993 1992(tri) 1991 1990 1989
Net asset value,
beginning of period $ 17.48 $ 12.00 $ 13.15 $ 12.89 $ 15.78 $ 13.99
Income from Investment Operations
Net investment income (.02) .20 .08** .02** .12 (.027)**
Net realized and unrealized
gain (loss) on investments 1.48 5.39 (1.23) .40 (2.37) 1.927
Total from investment
operations 1.46 5.59 (1.15) .42 (2.25) 1.900
Less Distributions
From net investment income (.07) (.11) - (.16) (.01) (.003)
In excess of net investment
income (.06) - - - - -
From net realized gain (.27) - - - (.63) (.107)(s diamond)
Total distributions (.40) (.11) - (.16) (.64) (.110)
Net asset value, end of period $ 18.54 $ 17.48 $ 12.00 $ 13.15 $ 12.89 $ 15.78
TOTAL RETURN (dagger) 8.56% 47.06% (8.75)% 3.37% (14.99)% 13.65%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period
(000 omitted) $ 458,866 $ 493,533 $ 116,277 $ 95,051 $ 86,354 $ 111,811
Ratio of expenses to average
net assets 1.59%* 1.59% 1.84% 1.88% 1.59% 1.40%
Ratio of net investment income
to average net assets (.19)%* .15% .65% .12% .88% (.18)%
Portfolio turnover rate 169%* 77% 105% 143% 118% 133%
* ANNUALIZED
(tri) AS OF NOVEMBER 1, 1991, THE FUND DISCONTINUED THE USE OF EQUALIZATION ACCOUNTING.
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
** NET INVESTMENT INCOME (LOSS) PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
(s diamond) INCLUDES AMOUNTS DISTRIBUTED FROM NET REALIZED GAINS ON FOREIGN CURRENCY RELATED TRANSACTIONS TAXABLE AS ORDINARY
INCOME.
</TABLE>
EMERGING MARKETS
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Emerging Markets
Fund (formerly named International Opportunities Fund) has a 3% sales
charge, which has been waived through May 31, 1994.
CUMULATIVE TOTAL RETURNS
PERIODS ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
EMERGING MARKETS 3.08% 35.82% 74.77%
EMERGING MARKETS
(INCL. 3% SALES CHARGE) -0.01% 31.74% 69.53%
Morgan Stanley Emerging
Markets Free Index 8.47% 43.02% 172.56%
Average Emerging Markets
Fund 8.09% 36.31% 89.35%
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on November 1, 1990. You can compare the fund's figures to the
performance of the Morgan Stanley Emerging Markets Free Index - a broad
measure of the performance of stocks in developing countries weighted by
each country's market capitalization (or the total value of its outstanding
shares). Mexico, Malaysia, Brazil, and Thailand are most heavily weighted,
and together account for over 60% of the index. Keep in mind that before
February 1992, the fund's objective was more broadly defined, and did not
focus specifically on emerging markets. However, you can also compare the
fund's performance to the average emerging markets fund, which reflects the
performance of 21 funds with similar objectives tracked by Lipper
Analytical Services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIODS ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
EMERGING MARKETS 35.82% 17.30%
EMERGING MARKETS
(INCL. 3% SALES CHARGE) 31.74% 16.28%
Morgan Stanley Emerging Markets Index 43.02% 33.18%
Average Emerging Markets Fund 36.31% 19.98%
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Emerging Markets (322) MS Emerging Markets Free
11/01/90 9700.00 10000.00
11/30/90 9564.20 9479.74
12/31/90 9777.33 9880.37
01/31/91 9709.16 10679.30
02/28/91 10118.18 12260.21
03/31/91 10108.44 12766.06
04/30/91 10332.42 12903.41
05/31/91 10332.42 13918.67
06/30/91 9972.10 13421.82
07/31/91 10186.35 14119.08
08/31/91 10108.44 14418.70
09/30/91 10225.30 13869.26
10/31/91 10127.92 14439.40
11/30/91 9991.58 14225.77
12/31/91 10438.07 15824.40
01/31/92 10517.68 17656.36
02/29/92 10826.14 18442.83
03/31/92 10806.24 19068.46
04/30/92 11064.96 18940.35
05/31/92 11542.58 18873.02
06/30/92 11522.68 17002.12
07/31/92 11144.56 17189.36
08/31/92 10865.95 16390.47
09/30/92 10796.29 16450.88
10/31/92 10995.30 17332.58
11/30/92 10905.75 17144.49
12/31/92 11048.91 17652.99
01/31/93 11201.38 17738.37
02/28/93 11770.60 18033.91
03/31/93 12095.86 18628.41
04/30/93 12482.12 19056.85
05/31/93 12756.56 19581.32
06/30/93 12919.19 20162.41
07/31/93 13142.81 20705.31
08/31/93 14057.63 22457.49
09/30/93 14372.73 23058.76
10/31/93 16446.31 25127.66
11/30/93 17096.84 26239.62
12/31/93 20082.32 30576.92
01/31/94 19501.26 31133.23
02/28/94 18950.78 30579.38
03/31/94 17115.84 27812.28
04/30/94 16952.74 27255.97
Let's say you invested $10,000 in Fidelity Emerging Markets Fund on its
start date and paid the 3% sales charge. By April 30, 1994, it would have
grown to $16,953 - a 69.53% increase on your initial investment. That
compares to $10,000 invested in the Morgan Stanley Emerging Markets Free
Index, which would have grown to $27,256 over the same period - a 172.56%
increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
EMERGING MARKETS
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Richard Hazlewood,
Portfolio Manager of Fidelity Emerging Markets Fund
Q. RICHARD, HOW DID THE FUND PERFORM?
A. After spectacular growth in 1993, both emerging market stocks and the
fund suffered through a sharp correction during the first four months of
1994. For the six months ended April 30, 1994, the fund had a total return
of 3.08%. That trailed both the Morgan Stanley Emerging Markets Free index,
which rose 8.47%, and the average emerging markets fund tracked by Lipper
Analytical Services, which was up 8.09% during the same period. The fund
returned 35.82% for the 12 months ended April 30, compared to 43.02% for
the index and 36.31% for the average fund.
Q. FROM THESE NUMBERS, IT APPEARS THE RECENT DOWNTURN IN EMERGING MARKETS
WAS STEEP. WHAT HAPPENED?
A. I think that, to put it simply, stocks got ahead of themselves. In 1993,
the earnings of many emerging market companies were growing very rapidly.
However, their stock prices rose even faster. Investors were attracted by
the fantastic growth rates of these companies. Plus, returns were unusually
low in safer, short-term investments. All this euphoria elevated valuations
- - - stock prices compared to other measures such as earnings - to levels that
were unsustainable, especially in the face of higher interest rates. In
1994, company earnings in emerging markets are still meeting our
expectations. But stock prices have fallen as investors have caught their
breath. Granted a correction is painful, but lower valuations have made
these stocks much more attractive going forward.
Q. WHY DID THE FUND TRAIL THE INDEX?
A. Several reasons. First, last year's biggest winners - fast-growing
stocks that helped the fund top the index - were this year's biggest
losers, especially in the initial emerging markets sell-off in January. I
don't think I can stress enough that extreme volatility is the rule of
emerging market investing rather than the exception. Second, the
composition of the index changed, and because of various regulations, the
fund wasn't able to invest freely in countries that together make up
roughly 30% of the index.
Q. HOW DID THAT HURT PERFORMANCE?
A. Some countries that are new to the index, but were off-limits to the
fund, have been among this year's top performers. India is a good example.
It was added to the index at the end of December, and its stock market was
up 11% in the first quarter, while the index fell. We have been trying to
gain access to the Indian market, but there's a problem with custodial
banks. You might call it "the paper chase." You see every time an
institutional investor buys a reasonably large block of stock in India, the
transaction can involve 300 to 400 pieces of paper, as the stock is bought
from often hundreds of individual investors. You can imagine how that bogs
down the system; India's custodial banks just aren't equipped to take on
new clients, given the problems of processing large foreign orders. The
fund has recently received approval to invest there, however, and I hope to
have a custodial bank in place before the end of the year. Chile, Colombia,
Peru and South Korea are other examples of markets in which the fund cannot
invest freely.
Q. WHAT OTHER PROBLEMS DID THE FUND FACE?
A. The fund had a 7.8% stake in Brazil at the end of April, and in
hindsight, investing more heavily there would have helped. Because of the
fund's success, investors had flooded the fund with a lot of new cash by
the first of the year. I thought very seriously about increasing the fund's
investment in Brazil, mainly due to a new plan designed to reduce
inflation. However, Brazil is not a very liquid market, meaning I could
invest, but I may not be able to sell those investments quickly if need be.
Given the volatility of the fund's assets around the turn of the year, this
was not a risk I was willing to take. Instead, I kept most of the money in
short-term investments, which, as it turned out, helped me maintain the
fund's liquidity as it decreased in size from February through April. So
although not being more heavily invested in Brazil hurt the fund's
performance in January, I still feel that my decision to avoid compromising
the fund's liquidity was in the best interests of the shareholders.
Q. THE FUND DID HAVE DRAMATIC SHIFTS IN SIZE THROUGHOUT THE PAST SIX
MONTHS. HOW DID YOU MANAGE THE CHANGES?
A. The fund nearly tripled in size in three months; assets were $758
million on October 31 and shot up to almost $2 billion by the end of
December. But as the markets fell, the fund's assets decreased to nearly
$1.5 billion by April 30. It was tricky to steer the fund in that
environment, given the volatile and illiquid nature of the markets that the
fund invests in. I've already mentioned that I limited the fund's
investment in Brazil to help keep the fund liquid. Instead, I invested in
larger, more liquid Far East markets such as Hong Kong and Singapore,
rather than in places such as Malaysia, where it can be difficult to sell
stocks. The fund's performance may have been better with a more stable
asset base; it's difficult to pinpoint that. But given these conditions, I
feel comfortable about the way in which I managed the fund.
Q. THE FUND'S STAKE IN BONDS INCREASED FROM 1.7% SIX MONTHS AGO TO 11.3% BY
APRIL 30. WHERE WERE YOU FINDING OPPORTUNITIES?
A. Although this is primarily a stock fund, the prices of emerging market
bonds have fallen - and yields risen - more rapidly than stocks over the
past few months, and they now offer excellent value. Part of this
investment is in Argentine Brady bonds, which don't carry currency risk
because their prices are tied to the U.S. dollar. On the stock side, I
added to the fund's stake in some of its top 10 stocks - which didn't
change much during the period - and added some new names.
Q. ANY EXAMPLES?
A. The biggest new name is Consolidated Electric Power Asia (CEPA). As I've
mentioned in past reports, Asian utilities are often spectacular growth
stocks - meaning they have fast-growing earnings - as opposed to the more
defensive, dividend-paying nature of utility stocks in the United States.
Demand for electricity appears almost limitless in the Far East. CEPA's
earnings projections look very strong, and it's valuation has recently
fallen into a very attractive range. One of the company's newest projects
is building new power plants in the Philippines, which is a story in
itself.
Q. WHAT'S GOING ON THERE?
A. In recent years, electrical brownouts of seven or eight hours a day were
common in the Philippines. And Manila is a hot, sweaty place this time of
year. Well, the country's new president promised to make the lights stay
on. He's done it by bringing in huge diesel barges. They sit in the harbor,
plug into the country's electric system, pump away, and bill for services
rendered. This has created several investing opportunities. I've increased
the fund's stake in Van Der Horst, a Singapore-based firm that supplies and
operates some of the barges. I've also invested more heavily in San Miguel,
a leading food and beer company. Now that people can go out, buy food and
beer, put it in their refrigerators, and not have it rot in a week, San
Miguel's quarterly earnings are far exceeding anyone's expectations.
Q. LET'S LOOK TO THE FUTURE. WHAT'S YOUR OUTLOOK?
A. As I've mentioned, stock valuations - while still high in some areas -
are much lower than they were six months ago. In addition, many emerging
market companies continue to produce strong earnings growth. Although
emerging market stock prices are often extremely volatile, I think its only
a matter of time before that earnings growth is reflected in higher stock
prices. My confidence in these markets shows in the fact that the fund
carried relatively little cash at the end of April.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in common stocks
of emerging economies and developing capital
markets
START DATE: November 1, 1990
SIZE: As of April 30, 1994, more than $1.4 billion
MANAGER: Richard Hazelwood, since July
1993; assistant, Fidelity Low Priced Stock
Fund and Fidelity Contrafund, 1992-1993;
analyst, Japanese stocks, 1991-1992; joined
Fidelity in 1991
(checkmark)
RICHARD HAZELWOOD ON EARNINGS GROWTH IN EMERGING
MARKETS:
"Quite often stock prices fall on news of disappointing
earnings. That hasn't been the case in emerging
markets in 1994. Yes, a correction hit stock prices
hard, but it happened mainly because stocks were
getting so expensive. Investors moved a lot of money
out of Southeast Asia and into markets such as Japan,
which offered cheaper stocks. However, the underlying
earnings story in emerging markets hasn't changed.
As these countries get up to speed on basic needs
such as infrastructure, selected companies will remain
among the fastest growing in the world.
"For example, Manila Electric - a stock the fund
bought and sold during the past six months - supplies
and distributes electricity in the Philippines. When I
tried to figure out the company's earnings potential,
they told me, `Look, it's simple. Every three or four
years we double earnings.' And when I punched the
numbers, sure enough, it was true. There aren't many
companies in the world that can boast earnings growth
like that. If I can find these companies consistently,
over time stock prices should follow earnings."
(bullet) The fund's combined stake in Malaysia and Hong
Kong decreased from 33.3% on October 31 to 29.4%
on April 30. These markets were among the strongest
performers in 1993, but have been among the worst
performers in 1994. During January, the fund took
profits in both the Malaysian and Hong Kong
markets, which were up sharply in December. Over
the next six months, the fund may invest more
heavily in these markets, now that their valuations
have fallen to more reasonable levels.
(bullet) The fund's investment in Mexico increased from
16.3% six months ago to 17.0% by the end of April.
Several events, including a peasant uprising in
southern Mexico and the assassination of a leading
presidential candidate, made the Mexican market very
volatile. Yet, the fund's largest stock investments in
Mexico, conglomerate Grupo Carso and telephone
company Telefonos de Mexico, rose during the period.
EMERGING MARKETS
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United
States 7.9%
Argentina 9.4%
Row: 1, Col: 1, Value: 7.9
Row: 1, Col: 2, Value: 9.300000000000001
Row: 1, Col: 3, Value: 3.4
Row: 1, Col: 4, Value: 11.9
Row: 1, Col: 5, Value: 17.2
Row: 1, Col: 6, Value: 18.5
Row: 1, Col: 7, Value: 3.7
Row: 1, Col: 8, Value: 10.9
Row: 1, Col: 9, Value: 7.8
Row: 1, Col: 10, Value: 9.4
Thailand 9.3
%
Brazil 7.8%
Singapore 3.4%
Hong Kong 10.9%
Other 11.9%
Korea (South) 3.7%
Mexico 17.2%
Malaysia 18.5%
AS OF OCTOBER 31, 1993
United
States 8.6%
Argentina 5.9%
Row: 1, Col: 1, Value: 8.6
Row: 1, Col: 2, Value: 9.6
Row: 1, Col: 3, Value: 7.9
Row: 1, Col: 4, Value: 7.7
Row: 1, Col: 5, Value: 16.3
Row: 1, Col: 6, Value: 20.5
Row: 1, Col: 7, Value: 2.8
Row: 1, Col: 8, Value: 12.8
Row: 1, Col: 9, Value: 7.9
Row: 1, Col: 10, Value: 5.9
Brazil 7.9%
Thailand 9.6%
Hong Kong 12.8%
Singapore 7.9%
Indonesia 2.8%
Other 7.7%
Malaysia 20.5%
Mexico 16.3%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 80.8 89.7
Bonds 11.3 1.7
Short-term and other investments 7.9 8.6
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Telefonos de Mexico SA sponsored ADR representing shares Ord. Class L
(Mexico, Telephone Services)
2.0 1.3
Grupo Carso SA de CV Class A-1
(Mexico, Conglomerates) 2.0 1.6
Technology Resources
(Malaysia, Air Transportation) 1.9 1.6
Cemex SA, Series B
(Mexico, Building Materials) 1.3 1.6
YPF Sociedad Anonima sponsored ADR representing Class D shares
(Argentina, Oil & Gas)
1.0 1.3
Telecom Argentina Stet France
(Argentina, Telephone Services) 0.9 1.1
Hong Kong Land Holdings Ltd.
(Hong Kong, Real Estate) 0.9 0.4
Telebras PN (Pfd. Reg.)
(Brazil, Telephone Services) 0.9 1.2
Consolidated Electric Power Asia Ltd.
(Bermuda, Electric Utility) 0.9 -
Compania Siderurgica Nacional 0.9 0.9
(Brazil, Iron & Steel)
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 23.1 17.3
Construction & Real Estate 15.8 16.2
Utilities 10.6 10.5
Basic Industries 10.5 7.9
Media & Leisure 4.7 8.1
Nondurables 4.7 5.1
Transportation 3.4 5.2
Retail & Wholesale 3.4 3.2
Durables 3.1 3.7
Energy 2.8 3.2
EMERGING MARKETS
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 80.2%
SHARES VALUE (NOTE 1)
ARGENTINA - 5.3%
Astra Comp Argentina de
Petroleum (Reg.) 1,580,720 $ 3,562,279 04699B94
Bagley Y Cia Ltd. SA (b) 117,760 454,285 05699C22
Banco de Galicia Y Buenos Aires SA
sponsored ADR representing Class B
shares 144,385 4,385,694 05953820
Banco del Sud SA 23,652 393,410 05957M92
Banco Frances del Rio PL (Reg.) 449,759 3,997,359 21199692
Banco Frances Rio Plata SA ADR 6,200 164,300 05959110
Buenos Aires Embotelladora sponsored
ADR representing 2 shares Class B 77,100 2,650,313 11942420
Central Costanera SA ADR (b) (c) 125,100 3,753,000 15324M10
Central Puerto SA ADR (c) 16,000 600,000 15503810
Commercial del Plata (b) 482,770 2,660,555 20199392
Interamericania de Auto Ord. 497,754 6,832,893 26899722
Molinos Rio de La Plata (Reg) 490,883 6,049,961 60899C22
Perez Companc Class B (b) 2,057,750 10,309,369 71399723
Telecom Argentina Stet France 2,651,879 14,561,415 90899992
Telefonica Argentina Class B 929,500 5,886,217 87999D92
YPF Sociedad Anonima sponsored ADR
representing Class D shares 633,100 15,669,225 98424510
81,930,275
BERMUDA - 1.7%
Consolidated Electric Power Asia Ltd. (b) 9,325,723 13,883,484 20855292
Consolidated Electric Power Asia Ltd.
sponsored ADR (c) 76,800 1,104,000 20855210
Jardine Strategic Holdings Ord. 3,011,500 11,032,841 47199020
Wing On International Holdings Co. Ltd. 4,000 8,906 97499A22
26,029,231
BRAZIL - 7.1%
Acesita (Acos Espec Itabira) Ord. 13,706,700 629,549 00499L22
Aracruz Celulose SA ADR (b) (c) 232,100 3,162,363 03849610
Bradesco PN 467,765,460 5,856,424 10599992
Brahma (Cia Cervejaria) PN (Pfd. Reg.)
Class B 19,181,200 4,551,891 15799492
Brahma (Cia Cervejaria) 984,887 233,724 15799496
Brahma (Cia Cervejaria)
(warrants) (b) 1,807,018 75,952 15799494
Brasmotor PN 23,846,000 6,776,079 10599892
Casa Anglo PN Ord. (b) 6,500,000 1,347,840 13599392
Celedsc PN B Ord. (b) 890,000 533,137 15199E22
Cimento Itau PN Ord. (b) 1,234,000 275,787 14799392
Comp Paulista de Forca Luz Ord. 25,402,260 1,033,872 20499922
Comp Vale Do Rao Doce PN Ord. (b) 18,200,000 1,663,116 20499792
Compania Siderurgica Nacional (b) 520,240,000 13,864,396 24499523
Consul PN (Pfd. Reg.) 115,000 74,188 21099392
Copene Petro Do Nordeste SA (b) 800,000 279,560 21799722
Coteminas PN 6,577,752 1,783,229 22199692
Duratex Corp. PN 20,365,000 936,790
Electrobras ON (b) 8,400,000 1,806,336 69699998
Electrobras PN B (b) 30,470,390 6,622,435 69699993
IOCHP Maxion Ord. 850,000 385,143 46199F22
Itaubanco PN (Pfd. Reg.) 13,204,400 2,636,655 46599A92
Karsten PN 1,451,638 49,617 48599B92
Light (Servicos de Electric) SA Ord. 11,567,100 3,482,160 53299892
Lojas Americanas PN (b) 80,493 18,051 54199A93
Lojas Americanas:
(Reg.) (b) 630,000 140,314 54199A92
(warrants) (b) 11,907 7,316 54199A95
Moinho Santista Gerais Ord. 85,000 298,978 60899F22
Petrobras PN (Pfd. Reg.) (b) 136,960,000 13,148,160 71699794
Sadia Concordia PN (Pfd. Reg.) 94,750 81,499 78699B93
SHARES VALUE (NOTE 1)
Souza Cruz Industria Comerico (b) 70,000 $ 451,578 84599D92
Telebras ON 96,143,000 2,776,610 95499795
Telebras PN (Pfd. Reg.) 395,192,200 14,249,497 95499792
Telepar 1,009,095 216,996 87999F22
Telesp PN (Pfd. Reg.) 29,608,000 9,209,272 87999B93
Unibanco (Banco de Inv. Brasil) PN 15,380,000 1,086,751 90599A94
Unibanco (Banco de Inv. Brasil) PN (rights) 1,712,678 19,730 90599A96
Usiminas 10,565,800,000 10,386,469 90599A96
110,151,464
CHILE - 1.7%
Chile Fund, Inc. 47,556 2,151,909 16883410
Comp Cervecerias Unidas SA ADR 397,700 8,600,263 20442910
Compania de Telefonos de Chile SA
sponsored ADR (b) 34,300 3,087,000 20444920
Cristalerias de Chile SA sponsored ADR 60,700 1,350,575 22671410
Enersis SA sponsored ADR (b) 254,600 5,219,300 29274F10
Madeco SA ADR (b) 55,100 1,597,900 55630410
Maderas Y Sinteticos Sociedad Anonima
Masisa sponsored ADR (b) 112,200 2,636,700 55646510
Soc Quimica Y Minera de Chile ADR (b) 38,900 1,225,350 83363510
25,868,997
CHINA (PEOPLE'S REP.) - 0.1%
Shanghai Diesel Engine B 396,800 357,120 84299A22
Shanghai Hero Pen Class B 1,349,600 477,758 84399B22
Shanghai Ind. Sewing Machine B 335,600 170,485 84399D22
Shanghai Jinjang Tower Co. Ltd. 419,000 280,730 84599U22
Tsingtao Brewery Co. Ltd. (b) 32,000 31,069 87299922
1,317,162
COLOMBIA - 0.1%
Banco Ganadero SA ADR (c) 50,000 1,150,000 05959410
Corp. Fin. del Valle ADR B (b) (c) 7,837 207,681 21986910
1,357,681
GREECE - 0.0%
Hellenic Bottling Co. SA (b) 7,500 247,062 42399A92
HONG KONG - 10.2%
Allied Group Ltd. 5,000,000 614,900 01999322
Amoy Properties Ltd. 3,955,000 5,222,340 03199192
CDL Hotels International Ltd. 4,234,000 1,616,922 14999792
Cheung Kong Ltd. 691,000 3,265,044 16674410
Chevalier International Holdings Ltd. 6,300,000 970,515 16699B22
China Motor Bus Co. Ltd. 49,000 501,120 16940110
China Resources Enterprise Ltd. 3,326,000 1,259,423 18899292
Chinney Investments Ltd. (b) 8,168,000 1,628,372 16999B22
Citic Pacific Ltd. Ord. 2,895,000 8,057,596 45299792
Companion Building Material Ltd. (b) 500,000 161,820 20399922
Dah Sing Financial Holdings (b) 16,875 53,303 23899892
Dao Heng Bank Group Ltd. 1,582,000 4,792,258 23799F22
Esprit Asia Holdings Ltd. 7,442,000 3,082,923 29699522
First Pacific Bancshares Holding (b) 2,050,000 472,381 33699292
First Pacific Co. Ltd. 13,545,305 6,093,491 33699192
Fortei Holdings Ltd. 5,350,000 1,066,576 34999D22
Four Seas Travel International Ltd. 1,244,000 204,526 35099722
Glynhill International Ltd. 500,000 23,300 37199492
Gold Peak Industries Ltd. 954,000 364,323 38074499
Grand Hotel Holdings Ltd. Class A 4,675,000 1,891,271 38599292
Grand Orient Holdings Ltd. 338,000 113,764 38699722
Great Eagle Holdings Ltd. 5,334,000 3,141,833 39099394
Guangzhou Investment Co. Ltd. 100,000 28,480 40099G22
Guoco Group Ltd. 1,024,000 4,739,082 40299692
HKR International Ltd. 118,000 109,985 43999192
HSBC Holdings PLC 620,000 6,862,402 42199192
Hang Lung Development Corp. 2,200,000 3,787,850 41099310
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
HONG KONG - CONTINUED
Harbour Ring International Holdings 500,000 $ 100,975 41199B92
Henderson Investment Ltd. 2,700,000 2,009,799 42599422
Henderson Land 250,000 1,229,820 42599010
Hon Kwok Land Investment Ltd. Ord 3,958,000 1,562,777 43899192
Hong Kong & China Gas Co. Ltd. 1,720,000 3,696,194 43855010
Hong Kong & China Gas Co. Ltd.
(warrants) (b) 110,000 219,296 43855092
Hong Kong & Shanghai Hotels 1,575,500 2,427,074 71899292
Hong Kong Daily News Holdings Ltd. 1,756,000 591,034 50899192
Hong Kong Electric Holdings Ord. 1,100,000 3,246,727 43858010
Hong Kong Land Holdings Ltd. 5,172,000 14,529,027 43858292
Hopewell Holdings Ltd. 4,765,000 4,256,289 44099999
Hutchison Whampoa Ltd. Ord. 1,749,500 7,190,777 44841510
Hysan Development Co. Ltd. 1,093,000 3,197,768 44916510
International Bank of Asia Ltd. 10,000 4,143 45899E22
Island Dyeing & Printing Co. 151,000 295,170 46099C22
JCG Holdings 6,836,000 4,358,429 46799792
Jardine International Motor Corp. 708,000 701,154 47499292
Jardine Matheson & Co. Ltd. Ord. 751,202 4,910,961 47111510
Kumagai Gumi (b) 1,300,000 1,379,989 50099210
Kwong Sang Hong International Ltd. 600,000 225,252 50599192
Lai Sun Development Co. Ltd. (b) 14,400,000 2,870,784 50699992
Lei Shing Hong Ltd. 50,000 54,371 52599D22
Li & Fung Ltd. 317,000 201,083 51899592
Mandarin Oriental International Ltd. Ord. 2,422,000 3,166,741 56259499
Mingly Corp. 1,400,000 268,226 60399C22
Nanyang Holdings Ltd. 430,000 623,453 63099D22
New World Development Co. 1,065,527 3,269,122 65171310
Oriental Press Group Ltd. (b) 3,901,000 3,156,260 68620099
Peregrine Investments Holdings 899,000 1,629,321 71399492
Pricerite Group Ltd. (b) 1,256,000 211,372 74199D22
QPL International Ltd. Ord. 75,000 32,040 74899492
QPL International Ltd. (warrants) 15,000 1,495 74899494
Regal Hotels Holding 920,000 238,197 75999110
Ryoden Development Ltd. 1,088,000 359,160 78399B22
S Megga International 987,000 287,483 99999C92
Seapower Resources International Ltd. 800,000 100,456 81299A92
Shangri-La Asia Ltd. (a) 1,704,000 2,338,263 84599M22
Shaw Bros. Hong Kong Ltd. 1,512,000 2,250,960 82028710
Shun Tak Holdings Ltd. 2,002,000 2,138,136 82799192
Siu Fung Ceramics Holdings Ltd. (b) 3,546,000 998,412 82999G22
Star Paging International Holdings Ltd. 378,000 133,343 85599692
Starlite Holdings Ltd. (b) 1,268,000 275,765 85599892
Swire Pacific Class A 1,450,000 10,417,887 87079410
Tai Cheung Holdings Ltd. (b) 984,600 1,414,823 93499892
Tai Ping Carpets Intl. Ltd. 50,000 31,393 94099A22
Techtronic Industries Co. Ord. 1,000,000 177,350 94799592
Tian Teck Land Ltd. 800,000 227,840 93699C22
Van Shung Chong Holdings Ltd. 200,000 33,658 92199F22
Varitronix International Ltd. 496,000 706,304 95099792
Watary International Holdings Ltd. 1,500,000 242,730 94199D22
Wharf Holdings (c) 350,000 1,350,216 96299110
Wing Hang Bank Ltd. (b) 15,000 34,759 97499522
Wing On Co. International Ltd. 1,503,000 2,451,588 97499092
157,951,446
INDIA - 0.3%
Arvind Mills Ltd. units (c) 44,600 245,300 04334810
Bombay Dyeing & Manu. Co. Ltd. GDR 60,000 540,000 09799H23
Cesc Ltd. units GDR (c) 7,500 382,500 15712820
Great Eastern Shipping Co. Ltd. GDR 47,700 417,375 39099823
Hindalco Industries Ltd. GDR (b)(c) 22,000 445,500 43306410
ITC Ltd.:
GDR (b) (c) 31,000 573,500 45031810
(warrants) (b) (c) 7,000 52,500 45031811
SHARES VALUE (NOTE 1)
Indo Gulf Fertilizer and Chemicals GDR 287,000 $ 861,000 45577P10
Mahindra & Mahindra Ltd. GDR 5,000 40,000 55999923
Southern Petrochemical
Industries GDS (b) 70,000 927,500 84361310
Tata Electric Companies GDR (c) 700 304,500 87656610
Videocon International Ltd. GDR 40,800 346,800 92657P93
5,136,475
INDONESIA - 1.5%
Andayani Megah PT (b) 44,000 128,539 03399722
Astra International (For. Reg.) 539,200 4,100,503 04699894
Bank Dagang Nas Indonesia PT 1,525,000 2,227,537 06099Q22
Bank International Indonesia Ord. (b) 1,483,500 4,299,435 06199B92
Bank Niaga PT (b) 19,000 107,928 06399C22
Barito Pacific Timber (For. Reg.) (b) 40,000 159,515 06799F23
Dharmala International Land 190,000 330,391 25399592
Duta Anggada Realty Ord. 342,500 766,306 26699192
Ganda Wangsa Utama PT (For. Reg.) 225,000 307,786 37499822
Gudang Garam PT Perusahaan 10,000 43,125 40199392
Iki Indah Kabel Indonesia PT 91,000 111,823 45199C22
Indah Kiat Pulp & Paper (For. Reg.) 169,500 231,866 45499B23
Inter Pacific Finance Corp. 95,000 136,562 46299792
Jakarta International Hotels &
Development Ord. 994,000 1,428,865 47399693
Kabelmetal Indonesia PT (b) 91,700 250,879 84599B92
Kalbe Farma 165,000 887,535 48699992
Lippo Bank (For. Reg.) 428,700 988,985 53699A23
Mayora Indah PT (c) 104,000 530,481 83099A92
Modernland Realty PT (b) 83,000 269,414 60999A92
Pakuwon Jati:
Ord. 514,250 727,309 69599392
PT (For. Reg.) 14,000 19,800 69599393
Polysindo Eka Perkasa PT (For. Reg.) 745,000 1,520,031 73199B23
Sampoerna Hanjaya Mandala 126,500 967,873 82299892
Sampoerna Hanjaya Mandala (For. Reg.) 40,000 306,047 82299893
Semen Gresik (For. Reg.) 150,000 542,536 84399693
Sucaco (b) 50,000 289,817 89399292
Trias Sentosa (For. Reg.) (b) 703,000 1,466,936 89599D22
23,147,824
KOREA (SOUTH) - 3.2%
Asia Motors Co., Inc. 51,300 832,029 04499B22
Boram Bank (b) 57,080 734,966 09999322
Boram Bank (New) 18,320 183,722 09999325
Central Investment & Finance (b) 17,000 357,806 15499422
Central Investment & Finance (For. Reg.) 2,897 55,594 15499423
Cho Hing Bank Co. Ltd. 49,000 509,595 17099E22
Cho Kwang Paint Industry Co. Ltd. 8,600 530,246 17399N22
Chosun Brewery Co. Ltd. (b) 10,728 270,956 22899822
Chosun Refractories Co. (b) 45,500 1,385,786 28099322
Chung Chong Bank Co. Ltd. 45,000 526,495 17899H23
Dae Chang Industrial Co. (b) 69,150 1,489,674 23399M22
Daewoo Electronics Components Co. (b) 1,800 26,743 23799E22
Daewoo Heavy Industries Ltd. 50,500 706,512 23999492
Daewoo Metal Co. 28,180 523,338 24999B22
Daeyu Securities Co. Ltd. 9,620 185,206 23399G22
Daihan Investment & Finance 30,000 657,422 23399P22
Dong Chang Paper Mfg. Co. Ltd. 20,000 212,950 25799Y22
Dong-A Investment & Finance 30,000 519,995 25899822
Dongbu Construction Co. 25,200 380,636 25799M22
Dongsung Chemical Industry Co. (b) 20,000 693,326 25799V22
Eagon Industrial Co. Ltd. (b) 14,440 311,076 27099922
Han Wha (b) 78,050 927,671 40999B22
Hanil Development Co. 63,300 1,253,931 41099822
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - CONTINUED
Hanshin Construction 2,465 $ 25,025 41199D23
Hanyang Chemical Corp. (b) 41,000 408,629 41199E22
Hung Chang Products Co. 20,000 445,710 44599A22
Hyundai Corp. (b) 20,000 586,851 40999922
Hyundai Engineering & Construction
Co. Ltd. 19,308 953,806 41599122
Hyundai Securities Co. Ltd. (b) 30,294 873,901 42699A22
Isu Chemical Co. (b) 786 10,218 46599E22
Jinro Ltd. (b) 28,000 693,326 73299422
Jinwoong, Inc. 18,400 207,305 75799522
Keum Kang Development Industries Co. 40,110 729,995 49299F22
Korea Air Terminal Service 16,370 409,402 52299422
Korea Electric Power Corp. 49,400 1,712,516 50099B92
Korea First Securities Co. (b) 19,522 401,220 50099K22
Korea Investment & Financial (b) 30,349 533,559 50599092
Korea Investment & Financial (New) (b) 17,680 310,828 50599093
Korea Iron & Steel Works Co. Ltd. 47,690 1,523,340 50099M22
Korea Machinery Co. Ltd. (b) 4,700 53,535 50599H22
Korea Tungsten Mining Co. (b) 600 24,291 50599S22
Korean Air (b) 61,500 1,949,238 52299522
Kukdong Construction Co. 106,104 1,799,708 50199L22
Kum Kang Industrial Co. Ltd. 30,600 496,298 50299H22
Kyung Nam Bank (b) 54,000 648,508 61499222
Kyungki Bank Ltd. (b) 115,000 1,245,821 61999922
Kyungwon Century Co. Ltd. 3,090 76,896 63099G22
Lucky Co. Ltd. (b) 105,000 1,897,981 54999E22
Midopa Company (b) 24,500 485,329 59899E22
Midopa Company (New) 6,664 119,633 59899E23
Miwon Co. Ltd. 10,300 257,596 61299693
Nae Wae Semiconductor Co. (b) 13,617 369,212 63099E22
Nae Wae Semiconductor Co. (New) (b) 3,000 81,342 63099E23
Nam Sung Corp. (b) 37,000 618,422 63299D22
Onyang Pulp Co. 35,000 441,996 53499222
Oriental Chemical Industry Co. (b) 113 3,050 68999C22
Samick Musical Instruments (b) 8,070 115,899 79599L22
Samsung Heavy Industries Co. Ltd. 30,000 1,619,413 82199C22
Samyang Foods Co. (b) 30,000 947,134 84699F22
Seoul Securities Co. (b) 30,800 541,488 83599P22
Shinhan Investment & Finance 30,000 761,421 95599C22
Shinhan Securities Co. (b) 87,000 1,507,985 82499G92
Shin Wha Engineering & Construction
Co. Ltd. 600 9,583 95399A22
Shu Kwang Corp. (b) 450 6,351 82599J22
Ssangyong Cement Co. (b) 12,320 419,462 76899392
Ssangyong Heavy Industries Co. Ltd. 34,312 458,796 77299122
Suheung Capsule Co. Ltd. 9,000 225,084 88499H22
Sunkyong Securities Co. (b) 20,000 403,615 96199D22
Tae Young Corp. 33,780 3,341,613 90899D22
Taekwang Industrial Co. 60 29,053 91099F22
Taihan Electric Wire Co. (b) 30,000 857,992 95199G22
Taihan Textile Co. (b) 5,000 246,378 95199H22
Yeonhap Insupanel Co. 31,500 475,795 98699C22
Youlchon Chemical Co. 30,000 1,225,702 99399P22
Youngone Corp. (b) 61 770 99599C22
Yu Hwa Securities Co. 79,030 1,418,762 98799E22
Yukong Ltd. (b) 23,000 1,167,512 98899K22
49,449,970
LUXEMBOURG - 0.0%
Banque Indosuez Lux SA (warrants) (b)(c) 1,500 15 06674N11
MALAYSIA - 18.5%
Advance Synergy BHD 1,630,000 4,108,790 00799B22
Affin Holdings BHD 1,664,000 2,721,755 00899492
Amalgamated Steel Mills 1,230,000 1,773,020 02499692
Aokam Perdana BHD 104,000 1,009,784 01899792
SHARES VALUE (NOTE 1)
Arab Malaysian Corp. 700,000 $ 1,751,435 00499F92
Arab Malaysian Finance (For. Reg.) (b) 432,000 1,597,130 00699A93
Arensi Holdings BHD 133,000 210,591 03999A22
Asiatic Development BHD 400,000 528,792 04599K22
Austral Amalgamated Tin BHD 261,000 432,759 05299C22
Ayer Hitam Tin Dredging Malaysia BHD (b) 200,000 485,474 05499722
Bandar Raya Development BHD 4,274,000 6,543,964 06000210
Berjaya Group BHD 200,000 215,848 08199A22
Berjaya South Island BHD 272,000 721,189 08499G22
Berjaya Sports Toto BHD (b) 3,371,000 6,042,585 08499E22
Berjaya Textile BHD 1,424,000 3,669,278 08499H22
Bolton Properties BHD 75,000 89,065 09799592
British American Life Insurance BHD (b) 1,118,000 2,713,800 11099E22
Buildcon BHD (b) 62,000 222,272 11999322
CHG Industries BHD 994,000 3,285,120 16699892
Commerce Asset Holding BHD 937,000 3,324,186 20099492
Construction & Supplies (b) 250,000 742,215 21099722
Country Heights Holdings BHD 40,000 67,219 22299D22
DNP Holdings BHD (b) 30,000 39,211 23399L22
Daiman Development BHD 2,000 2,241 23499C23
Damansara Realty BHD 100,000 100,829 23599D22
Development & Commercial Bank 2,932,000 6,186,344 25199692
Dunlop Estates BHD 1,111,000 3,319,146 26599392
Ekran Berhad Ord. (b) 1,533,000 12,995,410 28299792
Faber Group BHD 1,491,000 2,049,022 30299892
Gadek BHD 814,000 3,860,558 36399D22
Gamuda BHD 30,000 95,227 36499A92
Ganda Holdings BHD 50,000 87,385 36999C22
Genting BHD 21,000 235,268 37245210
Golden Pharos BHD (b) 535,000 1,788,130 38299D22
Golden Plus Holdings BHD (b) 1,980,000 9,094,774 38399492
Golden Plus Holdings BHD (New) (b) 476,666 2,189,479 38399493
Granite Industries BHD 722,000 1,954,779 38799522
Ho Hup Construction Co. BHD 108,000 377,100 40899592
Hock Hua Bank BHD (b) 655,000 1,797,837 43499B22
Hong Leong Credit BHD 1,089,000 7,116,855 44699492
Hong Leong Credit (rights) (b) 99,000 277,280 44699493
Hong Leong Properties BHD 4,268,000 5,992,870
43899L22Hume Industries. . . . . . . . . . . . . . . . . . . 100,000
364,769
IGB Corp. BHD (Reg.) 50,000 45,933 44960092
IJM Corp. BHD (b) 789,000 2,740,197 45499592
Idris Hydraulic Malaysia BHD (b) 3,965,000 7,699,594 45199B92
Industrial Oxygen, Inc. BHD (b) 166,000 174,195 45999892
Island & Peninsular BHD 170,000 333,295 45699592
Johan Holdings BHD 1,550,000 1,516,551 92599D22
KFC Holdings BHD 10,000 29,315 49499792
KL Industries Holdings BHD 870,000 1,371,050 49799B92
Kamunting Corp. BHD 2,301,000 2,431,789 48399C22
Kelanamas Industries BHD 522,000 1,159,868 48799K22
Kelanamas Industries BHD (warrants) 16,000 15,655 48799K25
Kent George BHD 50,000 115,766 49099792
Kinta Kellas PLC (b) 82,000 127,388 49799C22
Kinta Kellas PLC (SG) 30,000 50,164 49799C24
Kumpulan Emas BHD (b) 480,000 677,573 52399493
Lam Soon Huat Development BHD 10,000 19,979 51299492
Land & General BHD 723,000 2,456,978 51499693
Larut Consolidated BHD 2,362,000 3,175,449 51799222
Leong Hup Holdings BHD (b) 62,400 133,991 52699692
Leong Hup Holdings BHD (warrants) (b) 10,400 2,913 52699695
Lien Hoe Corp. BHD (REIT) 100,000 159,833 53199722
Lingui Development BHD 803,000 2,758,835 53599722
London & Pacific Insurance Co. (b) 263,000 864,292 54199E22
Long Huat Timber Industry BHD (b) 342,000 447,008 54299592
MBF Capital BHD (b) 1,640,000 1,665,846 61199892
MBF Holdings BHD (b) 1,583,000 1,117,281 61799L22
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MALAYSIA - CONTINUED
MBF Holdings BHD Class A 741,500 $ 467,975 61799L24
MCSB Systems Malaysian BHD 572,000 1,901,111 56399222
MGR Corp. BHD (b) 365,000 1,990,068 55399492
Magnum Corp. BHD 3,205,500 7,541,516 55999392
Malakoff BHD 50,000 111,098 56099J22
Malakoff BHD (rights) (b) 25,000 21,006 56099J23
Malayan United Industries BHD 331,000 501,852 56091099
Malayawata Steel BHD (b) 50,000 97,094 56099192
Malaysia British Assurance BHD 439,000 786,916 56099N22
Malaysia Mining Corp. 1,050,000 1,756,671 56099K22
Malaysian Banking (b) 706,500 3,983,925 56090499
Malaysian Industries Development
BHD Ord. 201,000 307,753 56099L22
Malaysian Plantions BHD 2,692,000 3,056,120 56099R22
Malaysian Resources Corp. BHD 450,000 915,862 56099793
Malex Industries BHD 3,000 14,564 56199722
Malpac Holdings BHD (b) 9,000 30,753 56199622
Mentiga Corp. BHD 325,000 1,237,957 58799B22
Mercury Industry BHD 1,188,000 2,661,892 58999A22
Metacorp BHD 1,040,000 5,010,086 59099E92
Metrojaya BHD 332,000 619,910 59599F22
Minho BHD 40,000 76,929 60399822
Mulpha International Ltd. 815,333 1,327,525 62499A22
Multi-Purpose Holding BHD (b) 4,203,000 7,157,247 00099292
Mycom BHD 2,587,000 6,038,084 63199892
NCK Corp. BHD 100,000 207,260 62899C22
Negara Properties BHD 152,000 454,105 63999822
New Straits Times Press 1,000 3,174 64999592
North Borneo Timber BHD 1,408,000 3,812,090 65799B22
OSK Holdings BHD (b) 151,000 451,117 67899922
OSK Holdings BHD:
(For. Reg.) 150,000 448,129 67899923
(warrants) 207,500 269,661 67899926
O'Connor's Engineering & Trade 40,000 107,551 67899E22
Olympia Industries BHD 1,884,000 2,589,106 68199D92
Oyl Industries Ltd. 113,000 548,584 69599492
Pacific Chemicals BHD (b) 976,000 6,815,740 69599H22
Park May BHD 722,000 3,639,927 70099222
Pelangi BHD 602,000 571,021 70699492
Perlis Plantations BHD 200,000 597,506 71390092
Pernas International Hotel &
Property BHD (b) 97,000 123,161 71499392
Press Metal BHD 10,000 22,780 74199B22
Public Finance BHD (For.Reg.) 649,000 1,017,924 87799994
Rashid Hussain BHD 1,234,000 3,179,697 75399492
Renong BHD 5,729,000 7,787,544 75999H22
Resorts World BHD 1,400,000 7,842,254 76199592
Samanda Holdings BHD 750,000 2,674,770 91599193
Sistem Televisyen Malaysian 174,000 428,860 82999692
Southern Bank BHD 207,000 521,791 84199992
Sungei Way Holdings (b) 947,000 4,137,689 86799892
Super Enterprise Holdings BHD 19,000 29,091 98999Q22
Syarikat Kayu Wangi BHD 330,000 502,801 93599F22
Tan & Tan Development BHD (b) 981,000 1,172,305 89699B22
Technology Resources (b) 7,021,000 30,152,176 93699692
Telekom Malaysia BHD 334,000 2,494,586 94099892
Tenega Nasional BHD 101,000 561,991 92099992
Time Engineering BHD (b) 2,814,000 8,879,802 93099592
Tongkah Holdings BHD 1,388,000 2,550,214 94999C92
Tongkah Holdings BHD:
(rights) 302,666 146,935 94999C97
(rights) 181,600 113,932 94999C95
UMW Holdings BHD (b) 200,000 433,192 90302599
Uniphone Telecom BHD (b) 137,000 649,750 95499A92
United Engineers BHD 1,000 4,369 93099692
SHARES VALUE (NOTE 1)
YTL Corporation (b) 1,361,600 $ 6,254,265 98799092
YTL Corporation (warrants) (b) 181,000 446,113 98799094
Yangtzekiang BHD 250,000 1,867,205 98499G22
Zalik BHD 342,000 1,570,915 98899P22
287,166,520
MEXICO - 16.9%
Banacci SA de CV:
Class B (b) 637,000 3,901,988 06399896
Class C 2,020,500 13,707,213 06399893
Bufete Industrial SA sponsored ADR
representing 3 ordinary certificates
Banco (b) 52,700 1,521,713 11942H10
Cementos Apasco SA de CV Class A (b) 985,400 8,450,593 15299392
Cemex SA, Series B 896,000 19,429,339 15299293
Cifra SA Class C (b) 5,077,800 13,157,189 17178594
Coca-Cola Femsa SA de CV sponsored
ADR (b) 145,200 4,610,100 19124110
Controladora Commercial Mexicana
SA B-1 (b) 1,174,800 2,036,563 21299692
Desc (Soc. de Fomento Indus.) Class B 1,286,300 8,036,918 25299692
Empresas Ica Sociedad Controladora SA
de CV sponsored ADR representing
Ord Part. Cert. 312,200 7,414,750 29244810
Empresas La Moderna SA sponsored
ADR 108,500 2,780,313 29244910
Emvasa del Valle de Enah Ord. (b) 317,000 1,271,883 29299E22
Farmacia Benevides SA de CV Ord. (b) 454,400 2,198,932 31299422
Fomento Economico Mexicano SA
(FEMSA) B 1,614,000 7,513,880 34441892
Gruma SA Class B . . . . . . . . . . . . . . . . 62,200 398,232
Grupo Carso SA de CV Class A-1 (b) 3,159,500 31,498,225 40099594
Grupo Casa Autrey SA sponsored ADR (b) 91,900 2,527,250 40048P10
Grupo Dina (Consorcio G) ADR (b) 182,500 2,349,688 21030610
Grupo Embotellador de Mexico 113,500 1,578,223 30599422
Grupo Embotellador de Mexico
GDR 28,900 769,463 40048J30
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 504,300 12,418,388 40048610
Grupo Financiero Banorte C Ord. 35,000 175,804 40099H22
Grupo Financiero GBM Atantico SA sponsored
ADR (c) 16,100 285,775 40048F10
Grupo Financiero Probursa:
B1 Ord. 309,000 311,367 48999K22
Class L 28,737 39,607 48999K23
Grupo Financiero Serfin sponsored ADR (b) 458,900 10,095,800 40049A10
Grupo Industrial Maseca SA de CV:
ADR 14,000 351,750 40048830
57899894Class B (b) 2,664,300 4,422,818
Grupo Industry Bimbo SA de CV, Series A
Ord. (b) 212,830 1,779,559 60899995
Grupo Mexicano de Desarrollo Class L
ADR (b) 172,800 2,829,600 40048G20
Grupo Modelo SA de CV Class C Ord. (b) 22,500 447,244 40099M22
Grupo Posadas SA de CV Class L (b) 390,000 376,264 40048992
Grupo Radio Centro SA de CV
sponsored ADR (b) 39,800 905,450 40049C10
Grupo Sidek B Free shares 1,757,100 7,695,729 40099F22
Grupo Simec SA de CV ADR (b) 38,800 780,850 40049110
Grupo Situr SA de CV Class B (b) 1,606,113 4,250,177 40049292
Grupo Televisa GDS (b) (c) 52,400 2,777,200 40049J20
Grupo Televisa SA de CV 46,000 1,211,639 40049J97
Grupo Tribasa SA de CV sponsored
ADR (b) 117,779 2,885,586 40049F10
Herdez SA de CV Class A 1,321,407 1,380,091 42799F22
Kimberly Clark de Mexico Class A 626,100 11,774,130 49499392
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEXICO - CONTINUED
Mexico Value Recovery (rights) (b) 4,000,000 $ 40 59304893
Sanluis Corp. Ord., Series A-2 (b) 74,000 571,148 21987020
Sears Roebuck de Mexico SA de CV (b) 689,600 9,145,386 81240K92
Sears Roebuck de Mexico SA de CV ADR
representing Series B-1 (b) (c) 52,700 1,337,263 81240K10
Servicios Financieros Quadrum SA
sponsored ADR (b) 3,200 57,600 81763810
Telefonos de Mexico SA sponsored ADR
representing shares Ord Class L 535,400 31,521,675 87940378
Tolmex B2 SA (b) 770,300 9,271,909 94399492
Transport Maritima Mexicana A (b) 99,000 758,040 94899592
Vitro SA (b) 630,000 4,187,137 92850292
Vitro SA sponsored ADR (b) 133,600 2,672,000 92850230
261,869,481
PAKISTAN - 0.2%
Adamjee Insurance 46,000 470,258 00599492
Bank of Punjab (b) 33,150 89,068 79899A92
DG Kahn Cement 60,000 194,630 23999E22
National Development Leasing Corp. 278,100 619,629 63599492
Pakistan Electric 20,000 106,817 69599N22
Pakistan State Oil 58,800 645,423 34799292
Pel Appliances Ltd. (b) 77,500 584,053 70599922
Sui Southern Gas Pipelines Ltd. 94,000 200,200 89499F22
2,910,078
PANAMA - 0.6%
Banco Latino Americano de Exportaciones
SA Class E (b) 127,100 4,829,800 06199A92
Panamerican Beverages, Inc. Class A 120,700 4,149,063 69829W10
8,978,863
PERU - 0.4%
Banco de Credito del Peru T 511,700 1,377,701 06899B22
Compania Peruana Telefonos T 488,261 3,017,282 24499622
La Fabril SA T 462,983 1,063,597 50399B23
Minsur SA T 100,000 794,854 60499F22
Southern Peru Copper Corp. T 240,494 739,216 84399F22
6,992,650
PHILIPPINES - 2.5%
Ayala Corp. Class B 1,094,200 1,470,320 05499092
Ayala Land, Inc. Class B 2,361,100 3,001,218 05499392
Bacnotan Cement Corp. 1,220,000 1,196,295 07499222
Belle Resources Corp. 2,760,000 701,647 07899322
Filinvest Land, Inc. Ord. 9,562,750 2,604,702 31699J22
First Philippines Holdings Corp. 1,418,300 5,202,409 33699492
Guoco Holdings 8,940,000 1,509,787 40299A22
House of Investments, Inc. (b) 340,000 1,247,140 44199C92
JG Summit Holdings, Inc. B (b) 3,665,000 1,464,131 46615292
Kepphil Shipyard, Inc. (b) 50,000 7,354 49299H23
Lepanto Cons Mining Co. 10,190,000 81,418 52673292
Manila Mining Corp. Class B 178,420,000 1,684,285 59399C22
Meralco B (b) 532,330 10,246,410 58799A92
Metro Drug, Inc. Class B (b) 15,580,700 3,621,422 59699292
Metropolitan Bank & Trust Co. 13,500 372,617 59199D22
Philex Mining Corp. 50,000 4,812 71814230
Philippine Long Distance Telephone Co. 32,400 2,106,000 71825210
Robinson's Land Corp. 1,100,000 151,811 77099492
San Miguel Corp. Class B 249,000 2,179,372 79908540
Sanitary Wares Manufacure Corp. (b) 186,000 75,994 81099792
Steniel Manufacturing Corp. (b) 867,500 280,402 85899622
United Paragon Mining Corp. 10,000,000 6,500 91199J22
39,216,046
SHARES VALUE (NOTE 1)
PORTUGAL - 0.0%
CIN 6,250 $ 209,374 17599592
Mague (Constru Metalom) 1,586 61,529 55999192
Unicer Uniao Cervejeira SA (b) 5,000 170,467 93399A93
441,370
SINGAPORE - 3.4%
Causeway Investments Ltd. 200,000 331,854 14999E22
Chuan Hup Holdings Ltd. (b) 674,000 771,575 14899992
Clipsal Industries Holdings Ltd. (b) 111,000 643,800 18899192
Compact Metal Industry Ltd. (b) 126,000 158,017 20499B22
Far East-Levingston Shipbuilding Ltd. 54,000 227,474 30799192
First Capital Corp. Ltd. (b) 117,000 402,567 31999792
Focal Finance Ltd. (b) 288,000 703,840 34499B22
Focal Finance Ltd. (rights) 115,200 59,270 34499B23
Fuji Offset Plates Manufacturing Ltd. (b) 468,000 397,299 36599922
Hong Leong Finance Ltd. 1,184,000 3,380,900 44999D22
Hong Leong Finance Ltd. (warrants) 139,800 158,241 44999D23
Hour Glass Ltd. 683,000 764,304 44199E22
IPCO International 40,000 202,000 46299D22
Informatics Holdings Ltd. 1,449,000 1,677,406 45699D22
Jurong Cement (b) 732,750 2,214,883 48299792
Jurong Engineering Ltd. 53,000 378,352 49499692
Kay Hian James Capel Holding (For. Reg.) 898,000 1,588,203 48699B22
Keppel Finance Ltd. 1,858,000 2,939,542 49299D22
Kim Eng Holdings Ltd. 2,952,000 5,239,889 49499D92
Kim Eng Holdings Ltd. (warrants) (b) 629,800 546,805 49499D94
Liang Court Holdings Ltd. 621,000 603,066 52599A92
Malayan Credit Ltd. 100,000 208,374 56099092
Overseas Chinese Banking Corp. (b) 297,000 2,712,329 68999610
Overseas Union Bank Ltd. (For. Reg.) 80,000 406,457 68990192
Overseas Union Trust Ltd. 642,000 1,362,529 69499B22
Pacific Can Investment Holdings (b) 790,000 1,092,357 69499C22
Pacific Can Investment Holdings
(warrants) (b) 237,000 208,055 69499C24
Pentex Schweizer Circuits Ltd. (b) 950,000 1,435,782 70999222
Sal Industrial Leasing Ltd. 603,000 601,101 81499792
Sembawang Maritime Ltd. 988,500 4,481,908 81799592
Ssangyong Cement Ltd. 569,000 1,866,292 75299093
Tat Lee Finance Ltd. 556,000 983,342 87699E22
Tat Lee Finance Ltd. (warrants) (b) 252,000 165,309 87699E23
Tibs Holdings 633,000 2,381,536 94999792
Transmarco Ltd. 707,000 1,764,205 89499492
Van Der Horst Ltd. (b) 1,530,000 7,281,499 92099C22
Venture Manufacturing 719,000 1,664,672 92399992
Wing Tai Holdings Ltd. (b) 330,000 568,781 97499392
52,573,815
SOUTH AFRICA - 0.1%
Genbel Industries Ltd. Ord . . . . . . . . . . 100,000 190,989
South African Breweries, Inc. ADR 47,000 1,000,385 83621620
1,191,374
SRI LANKA - 0.2%
Aitken Spence & Co. Ltd. 120,000 936,197 00999F22
Aitken Spence & Co. Ltd. (rights) 25,000 34,218 00999F23
Blue Diamond Jewelry . . . . . . . . . . . . . 92,500 61,801
Development Co. of Ceylon (DFCC) 100,666 1,017471 25199C92
Distillery Co. of Sri Lanka (b) 1,350,000 277,168 25499D92
John Keells Holdings Ltd. GDR 61,500 471,224 48730210
Kelani Tyres Ltd. (Loc. Reg.) 63,000 64,008 48799N22
Lanka Tiles Ltd. 105,000 161,403 51599722
National Development Bank 31,000 218,678 63599B22
3,242,168
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TAIWAN - 0.1%
Shanghai Tyre & Rubber B shares 150,000 $ 84,000 84599R22
Taiwan Fund, Inc. 35,500 1,002,875 87403610
1,086,875
THAILAND - 5.7%
Advanced Information Services:
(For. Reg.) 288,800 11,010,644 00799793
(Loc. Reg.) 10,000 371,724 00799792
Asia Fiber Co. (For. Reg.) 378,500 379,552 04499592
Ayudhya Insurance Co. 157,400 1,800,286 05499593
Ban Pu Coal (For. Reg.) 317,000 4,658,061 06199593
Bangkok Bank 1,086,800 8,200,634 06099210
Bangkok Metropolitan Bank Public
(For. Reg.) 2,267,200 1,755,765 06199E23
Bangkok Steel Industry Co. Ltd. 75,500 181,404 06099P22
Bangkok Steel Industry Co. Ltd.
(For. Reg.) 150,000 360,405 06099P23
Bank of Ayudhya (For. Reg.) 50,000 155,877 05999998
Bumrungrad Hospital (For. Reg.) 35,500 131,116 06199693
Christiani & Nielsen Thai Ltd.:
(For. Reg.) 19,880 165,798 17599692
(warrants) (b) 8,520 16,918 17599694
Deves Insurance Co. Ltd. 14,000 219,063 25299E23
Eastern Printing Co. (For. Reg.) 586,000 1,524,344 27699323
Finance One Public Co.
(For. Reg.) 38,500 541,264 31799E93
First Bangkok City Bank (For. Reg.) 231,200 162,978 31899D93
General Financial & Services Pub. Co. Ltd.
(For. Reg.) 37,000 332,089 36999693
Hana Microelectronics Co. (For. Reg.) 77,100 716,497 40999693
Hemaraj Land & Development Co.
(For. Reg.) 198,300 1,141,918 42399B23
Industrial Finance Thai (For. Reg.) 744,000 1,359,176 45799896
International Broadcasting Corp.
(For. Reg.) (b) 43,500 518,269 45999E93
Juldis Development Co. (For. Reg.) 263,900 1,540,640 48199A93
Jutha Maritime Co. Ltd. (Loc. Reg.) 10,000 48,451 48299892
Krung Thai Bank (For. Reg.) 2,865,500 5,917,630 50599293
Land & House (For. Reg.) 131,200 2,990,818 51499393
MDX Co. Ltd. (For Reg.) 210,000 1,267,673 55699293
Matichon Newspaper Group (b) 10,000 104,051 60899793
Muramoto Electronics Thai PCL (For. Reg.) 70,000 539,317 62699923
Mutual Fund Co. Ltd. (For. Reg.) 36,700 690,858 65499B23
NTS Steel Group Co. Ltd. (For. Reg.) 50,000 138,999 64999893
National Finance & Securities Co.
(For Reg.) 59,800 769,468 63199593
National Petrochemical Co. 360,000 543,287 63799523
Navakij Insurance Co. 117,200 521,302 63999A23
One Holding Ltd. (For. Reg.) 60,000 164,416 68299B23
PTT Exploration & Production (For. Reg.) 100,000 496,426 74099B23
Pacific Insurance Co. Ltd. 76,000 428,594 69599L23
Pacific Insurance Co. Ltd. (rights)
(For. Reg.) 50,666 265,604 69599L24
Phatra Insurance Co. Ltd. (For. Reg.) 4,200 142,780 71799B23
Phatra Thanakit Co. Ltd. (Loc. Reg.) 800 27,069 71799592
Phoenix Pulp & Paper (Loc. Reg.) 10,000 30,183 71999093
Property Perfect Co. Ltd. (For. Reg.) (b) 47,800 573,296 74399F23
Quality Houses Co. Ltd. (For. Reg.) 148,900 1,023,022 74799G23
Raimon Land Co. Ltd. (For. Reg.) 144,000 794,916 75099822
Regional Container Lines (For. Reg.) 14,600 303,828 75899293
Renown Leatherwears Public Co. Ltd. 215,600 1,275,789 75999K23
S Khon Kaen Industries Co. Ltd. 310,700 1,196,897 56499F22
S&J International Enterprises (For. Reg.) 124,000 492,455 88499E93
SHARES VALUE (NOTE 1)
Safety Insurance Co. Ltd.:
(For. Reg.) 224,000 $ 1,014,138 79899393
(Loc. Reg.) 10,000 45,274 79899392
Sammakorn Co. Ltd.
(For. Reg.) 129,700 690,222 79599F23
(rights) (For. Reg.) 259,400 1,225,917 79599F24
Sawang Export Co. Ltd. (For. Reg.) 70,400 254,424 80999B23
Seafresh Industry (Thai) Co.:
(For. Reg.) (b) 5,300 34,940 81199D23
(Loc. Reg.) 25,600 168,769 81199D22
Siam Cement (For. Reg.) 24,000 1,044,639 78799010
Siam Chemicals Co. Ltd. (Loc. Reg.) 30,000 107,228 79999J22
Siam City Bank Ltd. (For. Reg.) 4,462,400 3,322,882 81199593
Siam City Cement Co. Ltd. (For. Reg.) 309,800 5,069,006 82570798
Siam Comm. Life Assurance (For. Reg.) 215,100 486,922 82799293
Siam Commerical Bank:
(For. Reg.) 81,392 507,488 78851090
(Loc. Reg.) 1,608 9,834 78851094
Siam General Factoring Co. Ltd.
(For. Reg.) 50,000 152,899 82899C23
Siam Pulp & Paper Co. (For. Reg.) 65,000 180,699 83299693
Siam Syntech Construction Public Co. Ltd. 20,000 107,228 83499H22
Siam Syntech Construction Public Co. Ltd.
(For. Reg.) (b) 10,000 63,542 83499H23
Sino Thai E&C Co. Ltd. (For. Reg.) 10,000 154,885 84799593
Sri Thai Superware Co. Ltd. (For. Reg.) 20,000 154,885 84499893
Strongpack Co. Ltd. (For. Reg.) 165,100 344,232 86399393
Sun Tech Group Co. Ltd. (For. Reg.) 75,000 165,310 86699H23
TPI Polene Public Co. Ltd.
(For. Reg.) 145,800 897,498 94799093
(Loc. Reg) (b) 40,000 238,284 94799092
Telecomasia Corp. Pub. Ltd. (For. Reg.) 20,000 79,428 87928D93
Thai Farmers Bank 572,700 2,956,753 90199010
Thai German Ceramic Industry (For. Reg.) 123,400 798,816 94699893
Thai Grantite Company Ltd. (For. Reg.) 361,200 1,707,020 95599A93
Thai Military Bank (For. Reg.) 666,000 1,877,920 90199989
Thai Modern Plastic Co. (For. Reg.) 236,800 1,222,558 90699D93
Thai Reinsurance Co. Ltd. (For. Reg.) 120,000 347,896 93799D23
Thai Telephone & Tel. Pub. Co. (c) 200,000 1,151,708 94999L22
Thai Wah Food Products (For. Reg.) 216,900 490,997 93699B23
Tipco Asphalt (For. Reg.) 30,000 312,152 95499594
Tong Hua Daily News Co. Ltd. (For. Reg.) 469,000 754,349 92199D23
Union Bank of Bangkok Ltd. 1,000 37,808 90499K22
Union Mosaic Industries (For. Reg.) 29,000 96,743 93199493
Unique Gas & Petrochemicals Co.
(For. Reg.) (b) 150,600 1,794,282 47799523
United Communications Industries
(For. Reg.) 5,000 116,362 91399E23
Wattachak Co. Ltd. (For. Reg.) 28,900 433,844 94299H23
Yong Thai Chemical Ind. (For. Reg.) 40,000 104,845 99599D23
88,716,177
TURKEY - 0.0%
Adana Cimento (b) 106,425 33,591 00699B92
Cukurova Electrik AS (b) 85,000 22,195 22999192
Goodyear 191,500 48,356 68999992
Goodyear:
(new) 95,750 24,178 68999994
(rights) 191,500 30,908 68999995
Guney Biraciliu (b) 172,000 115,981 40299792
Maret 153,000 41,267 56899692
Netas SA Class B Ord. (Bearer) (b) 260,000 106,311 64199527
Teletas (b) 120,000 27,890 87999C92
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
TURKEY - CONTINUED
Turk Demir Dokum (b) 77,333 $ 23,300 90099A92
Turkiye Garanti Bankasi:
ADR (b)(c) 75,000 93,750 90014810
(new) 17,250 2,079 90014896
569,806
UNITED KINGDOM - 0.0%
Cathay International Holdings PLC (b) 1,396,385 874,094 14999D22
UNITED STATES OF AMERICA - 0.1%
Duty Free International, Inc. 102,400 1,408,000 26708410
VENEZUELA - 0.3%
CA Venepal GDR Class A ADR (b)(c) 2,864 9,308 12477610
Corimon SA CA sponsored ADR 16,700 212,925 21872820
Electricidad de Caracas LA (b) 1,132,355 2,713,605 42799922
Mavesa SA sponsored ADR (c) 266,000 1,429,750 57771720
Venezolana de Prerreducidos Caroni
Venpreca CA GDR (c) 1,500 9,750 92264410
4,375,338
TOTAL COMMON STOCKS
(Cost $1,207,358,206) $ 1,244,200,257
PREFERRED STOCKS - 0.6%
CONVERTIBLE PREFERRED STOCKS - 0.1%
PHILIPPINES - 0.1%
Philippine Long Distance Telephone 1.4375
GDR representing 1 share preferred
Series 2 (c) 28,800 1,080,000 71825250
NONCONVERTIBLE PREFERRED STOCKS - 0.5%
KOREA (SOUTH) - 0.5%
Boram Bank 36,800 455,615 09999323
Boram Bank (New) 8,747 87,719 09999326
Boram Securities Co. Ltd. (b) 34,100 565,730 18599623
Daelim Industrial Co. 59,460 883,397 23699F23
Daewoo Heavy Industries Ltd. 22,346 279,429 23999494
Dongbu Construction Co. (b) 49,000 630,927 25799M23
Dongbu Steel Co. Ltd. (b) 57,230 1,530,478 25799L23
Hyundai Motor Service Co. (b) 39,000 2,303,206 42199424
Kolon International Corp. 20,000 361,520 73099423
Korea First Securities Co. (b) 20,400 381,379 50099K23
Sunkyong Securities Co. 10,000 179,522 96199D23
TOTAL NONCONVERTIBLE PREFERREED STOCKS 7,658,922
TOTAL PREFERRED STOCKS
(Cost $9,789,108) 8,738,922
CORPORATE BONDS - 6.1%
MOODY'S PRINCIPAL VALUE (NOTE 1)
RATINGS (D) AMOUNT (A)
CONVERTIBLE BONDS - 5.7%
BRITISH VIRGIN ISLANDS - 0.0%
Pacific Concord Financial Ltd.
euro 4 3/4%, 12/10/98 - $ 1,000,000 832,500 69412R9A
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
GRAND CAYMAN - 1.0%
Filinvest (Cayman Island) Ltd.:
euro 3 3/4%, 2/28/04 (c) - $ 2,500,000 $ 2,200,000 3170159A
3 3/4%, 2/28/04 (c) - 4,000,000 3,520,000 317015AA
Henderson Capital euro 4%,
10/27/96 (c) - 2,050,000 1,937,250 4247309A
JG Summit Cayman Ltd. 3 1/2%,
12/23/03 (c) - 4,570,000 4,021,600 466149AA
Peregrine Investment Finance
Cayman Ltd.:
euro 4 1/2%, 12/1/00 - 500,000 397,500 6933939A
4 1/2%, 12/1/00 (c) - 3,290,000 2,615,550 693393AA
14,691,900
HONG KONG - 0.7%
Applied International Holdings
euro 5 1/4%, 11/30/00 (c) - 100,000 70,000 0379239A
Goldlion Capital Ltd. 4 7/8%,
2/1/99 (d) - 2,750,000 2,131,250 381417AA
HKR International Ltd. euro
4 1/4%, 10/25/00 (REIT) (c) - 100,000 109,500 439991AA
HSH Overseas Finance Ltd.
euro 5%, 1/6/01 - 1,000,000 970,000 424997AA
Hon Kwok Land Treasury Ltd.
euro 4 7/8%, 12/15/00 - 3,000,000 2,550,000 43899JAA
Lai Fung O/S Fin. Ltd. euro
5 1/4%, 1/5/98 (d) - 4,790,000 3,927,800 50699CAA
Regal International Ltd. euro
5 1/4%, 12/5/08 - 500,000 478,750 759991AB
10,237,300
INDIA - 0.4%
Essar Gujarat Ltd. euro 5 1/2%,
8/5/98 - 40,000 52,000 296994AA
Gujarat Ambuja Cement Ltd.
3 1/2%, 6/30/99 (c) - 190,000 237,500 402042AA
Industrial Credit & Investment
Corp. 2 1/2%, 4/3/00 (c) - 1,180,000 967,600 456052AA
Jindal Strip euro 4 1/4%,
3/31/99 (c) - 460,000 455,400 642994AA
Nippon Denro Ispat:
euro 3%, 4/1/01 (c) - 550,000 437,250 6545549A
3%, 4/1/01 (c) - 2,535,000 2,015,325 654554AA
Scici Ltd. euro 3 1/2%,
4/1/04 (c) - 870,000 965,700 79599KAA
Sterlite Industry India Ltd.
3 1/2%, 6/30/99 (c) - 500,000 477,500 859737AA
5,608,275
MALAYSIA - 0.0%
OSK Holdings BHD 5%, 1/19/99
(unsecured) - MYR 103,750 33,708 678999AB
PHILIPPINES - 0.0%
Benpress Holdings Corp.:
euro 4 1/5%, 12/31/49 - 150,000 514,050 0823009A
4 1/5%, 12/31/49 (c) - 78,000 249,873 082300AA
763,923
CORPORATE BONDS - CONTINUED
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
THAILAND - 3.6%
Asia Credit Public Co. Ltd.:
euro 3 3/4%, 11/17/03 - $ 1,000,000 $ 965,000 047994AA
3 3/4%, 11/17/03 (c) - 1,300,000 1,251,250 044909AA
Bangkok Bank:
euro 3 1/4%, 3/3/04 (c) - 1,650,000 1,361,250 0598959A
3 1/4%, 3/3/04 (c) - 8,000,000 6,600,000 059895AA
CMIC Finance & Securities Co.
Ltd. euro 3 1/2%, 11/8/03 - 1,500,000 1,470,000 125993AA
Dhana Siam Finance & Securities
Co. Ltd. euro 4%, 10/6/03 - 300,000 483,000 242995AA
Hemaraj Land & Development
Co. euro 3 1/2%, 9/9/03 - 8,950,000 7,383,750 42399BAA
Juldis Development Co.
euro 4 1/4%, 12/22/03 - 3,070,000 2,486,700 48199AAA
Kiatnakin Finance & Securities
euro 4%, 11/30/03 - 1,000,000 780,000 496997AA
Land & House euro
5%, 4/29/03 - 2,500,000 4,362,500 514993AA
NTS Steel Group Co., Ltd.
euro 4%, 12/16/08 - 6,850,000 5,480,000 649998AA
Phatra Thanakit Co. Ltd.:
euro 3 1/2%, 12/13/03 - 4,420,000 4,541,550 717995AA
3 1/2%, 12/13/03 (c) - 3,000,000 3,082,500 717227AA
Siam Commercial Bank
3 1/4%, 1/24/04 (c) - 1,000,000 757,500 825715AA
Siam Syntech Construction
Public Co. Ltd. 4 1/2%,
2/25/02 (c) - 500,000 392,500 825719AA
Somprasong euro 3 7/8%,
1/21/04 - 2,500,000 1,775,000 83599CAA
Wall St. Financial & Securities
Co. 3 3/4%, 2/3/04 (c) - 480,000 349,200 93299BAB
Wattachak Co. Ltd. euro
3 1/2%, 12/6/03 - 11,650,000 12,698,500 94299HAA
56,220,200
TOTAL CONVERTIBLE BONDS 88,387,806
NONCONVERTIBLE BONDS - 0.4%
ARGENTINA - 0.0%
Acindar Industria Argentina de
Aceros SA 9 1/4%,
11/12/98 (d) - 1,000,000 957,500 0045149J
BRAZIL - 0.1%
Minas Gerais State:
euro 7 7/8%, 2/10/99 (c) - 2,000,000 1,580,000 602517AB
7 7/8%, 2/10/99 (c) B3 500,000 435,000 602517AA
2,015,000
INDONESIA - 0.2%
Indorayon Yankee 9 1/8%,
10/15/00 BB 500,000 453,750 69364LAB
Semen Sibinong PT euro 9%,
12/15/98 - 2,000,000 1,905,000 69364U9A
2,358,750
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
MALAYSIA - 0.0%
OSK Holdings BHD 7%, 1/19/99
(unsecured) - MYR 415,000 $ 134,831 678999AA
United Engineers Malaysia BHD
4%, 3/9/98 - MYR 100,000 33,610 9102139E
168,441
MEXICO - 0.1%
Dine SA euro 8 1/8%,
10/15/98 (d) - 1,000,000 922,500 25441T9A
SINGAPORE - 0.0%
Pacific Can Investment
Holdings 2 1/2%, 4/30/99 - SGD 237,000 137,179 69499CAA
THAILAND - 0.0%
Finance One Public Co.
3 3/4%, 2/7/01 - THB 272 10,802 31799EAA
TOTAL NONCONVERTIBLE BONDS 6,570,172
TOTAL CORPORATE BONDS
(Cost $129,984,298) 94,957,978
GOVERNMENT OBLIGATIONS (F) - 5.2%
ARGENTINA - 4.1%
Argentina Republic:
BOCON:
0%, 4/1/01 (d) - ARP 3,750,969 2,267,870 039995AH
0%, 4/1/01 (d) B1 26,043,521 18,220,308 039995AF
0%, 9/1/02 (d) - ARP 3,267,542 1,622,011 039995AJ
Brady:
euro 4%, 3/31/23 B1 9,000,000 4,758,750 039995AD
4%, 3/31/23 (c) - ARP 264,000 139,590 0401149Y
euro 5%, 3/31/05 (d) - 49,250,000 35,890,937 039995AU
0%, 3/31/05 (c) (d) - 129,000 94,008 039995AT
62,993,474
BRAZIL - 0.6%
Brazil Federative Republic IDU
euro 8 3/4%, 1/1/01 (d) B2 14,602,500 10,605,066 1057569E
GUATEMALA - 0.1%
Republic of Guatemala euro11%,
8/31/98 - 1,000,000 1,002,500
MEXICO - 0.2%
Mexican Government Brady
6 1/4%, 12/31/19 Ba3 4,000,000 2,565,000 597998MM
NIGERIA - 0.1%
Nigeria Brady 5 1/2%,
11/15/20 (d) - 2,250,000 945,000 997999AC
TRINIDAD & TOBAGO - 0.1%
Republic of Trinidad & Tobago
9 3/4%, 11/3/00 Ba2 2,000,000 1,820,000
TOTAL GOVERNMENT OBLIGATIONS
(Cost $67,939,814) 79,931,040
OTHER SECURITIES - 0.1%
PURCHASED BANK DEBT - 0.1%
PERU - 0.1%
Republic of Peru loan participation
refinanced under 1983 credit
agreement (b) (Cost $1,803,125) $ 2,500,000 $ 962,500 7156389B
REPURCHASE AGREEMENTS - 7.8%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/30/94 due 5/2/94 $121,286,971 $121,251,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $1,538,125,551) $1,550,041,697
CURRENCY ABBREVIATIONS
ARP - Argentinean peso
MYR - Malaysian ringgit
SGD - Singapore dollar
THB - Thai baht
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $70,777,294 or 4.7% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
6. Most foreign obligations have not been individually rated by S&P or
Moody's. The ratings listed are assigned to securities by FMR, the fund's
investment adviser, based principally on S&P and Moody's ratings of the
sovereign credit of the issuing government.
OTHER INFORMATION
The composition of long-term debt holdings as a percentage of total value
of investment in securities, is as follows:
MOODY'S RATINGS S&P RATINGS
Aaa, Aa, A 0.0% AAA, AA, A 0.0%
Baa 0.0% BBB 0.0%
Ba 0.3% BB 2.4%
B 2.3% B 0.0%
Caa 0.0% CCC 0.0%
Ca, C 0.0% CC, C 0.0%
D 0.0%
For some foreign government obligations, FMR has assigned the ratings of
the sovereign credit of the issuing government. The percentage not rated by
either S&P or Moody's amounted to 6.6% including long-term debt
categorized as other securities. FMR has determined that unrated debt
securities that are lower quality account for 6.3% of the total value of
investment in securities.
Purchases and sales of securities, other than short-term securities,
aggregated $1,572,898,343 and $751,524,456, respectively.
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $45,807 for the period (see Note 4 of Notes to Financial
Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $3,464,000. The weighted average interest rate was
3 7/8%. Interest expense includes $373 paid under the bank borrowing
program (see Note 5 of Notes to Financial Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $1,538,320,581. Net unrealized appreciation aggregated
$11,721,116, of which $154,382,622 related to appreciated investment
securities and $142,661,506 related to depreciated investment securities.
At September 30, 1993, the fund had a capital loss carryforward of
approximately $2,182,000 which will expire on September 30, 2001.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Aerospace & Defense 0.1%
Basic Industries 10.5
Conglomerates 2.3
Construction & Real Estate 15.8
Durables 3.1
Energy 2.8
Finance 23.1
Government Obligations 4.7
Industrial Machinery & Equipment 1.3
Media & Leisure 4.7
Nondurables 4.7
Precious Metals 0.1
Repurchase Agreements 7.8
Retail & Wholesale 3.4
Services 1.2
Technology 0.4
Transportation 3.4
Utilities 10.6
100.0%
EMERGING MARKETS
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $121,251,000) (cost $1,538,125,551) $ 1,550,041,697
(Notes 1 and 2) - See accompanying schedule
Cash 1,829,591
Receivable for investments sold 25,551,899
Receivable for fund shares sold 9,477,462
Dividends receivable 2,992,254
Interest receivable 2,359,393
Redemption fees receivable (Note 1) 1,725
TOTAL ASSETS 1,592,254,021
LIABILITIES
Payable for investments purchased $ 84,417,620
Payable for fund shares redeemed 6,901,393
Accrued management fee 951,482
Other payables and accrued expenses 2,060,727
TOTAL LIABILITIES 94,331,222
NET ASSETS $ 1,497,922,799
Net Assets consist of (Note 1):
Paid in capital $ 1,481,564,396
Distributions in excess of net investment income (71,187)
Accumulated undistributed net realized gain (loss) on investments 4,513,444
Net unrealized appreciation (depreciation) on investment securities 11,916,146
NET ASSETS, for 90,077,948 shares outstanding $ 1,497,922,799
NET ASSET VALUE, offering price and redemption price per share ($1,497,922,799 (divided by)
90,077,948 shares) (Note $16.63
4)
Maximum offering price per share (100/97 of $16.63) $17.14
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 9,488,068
Dividends
Interest 6,035,736
15,523,804
Less foreign taxes withheld (709,349
)
TOTAL INCOME 14,814,455
EXPENSES
Management fee (Note 4) $ 6,179,588
Transfer agent: 3,933,710
Fees (Note 4)
Redemption fees (Note 1) (289,610
)
Accounting fees and expenses 313,499
(Note 4)
Non-interested trustees' compensation 4,246
Custodian fees and expenses 1,858,101
Registration fees 205,494
Audit 31,634
Legal 6,447
Interest (Note 5) 373
Miscellaneous 4,330
Total expenses before reductions 12,247,812
Expense reductions (Note 6) (92 12,247,720
)
NET INVESTMENT INCOME 2,566,735
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) 4,903,714
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on investment securities (97,376,419
)
NET GAIN (LOSS) (92,472,705
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (89,905,970
)
OTHER INFORMATION
Accounting fees paid to FSC $311,857
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS YEAR ENDED
ENDED APRIL 30, OCTOBER 31,
1994 1993
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 2,566,735 $ 630,663
Net investment income
Net realized gain (loss) on investments 4,903,714 (387,679
)
Change in net unrealized appreciation (depreciation) on investments (97,376,419) 109,236,178
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (89,905,970) 109,479,162
Distributions to shareholders: (2,507,341) (101,676
From net investment income )
In excess of net investment income (629,323) -
From net realized gain - (191,171
)
TOTAL DISTRIBUTIONS (3,136,664) (292,847
)
Share transactions 2,168,877,893 671,166,140
Net proceeds from sales of shares
Reinvestment of distributions 3,075,480 282,611
Cost of shares redeemed (1,347,495,108) (36,857,488
)
Redemption fees (Note 1) 8,770,024 227,559
Net increase (decrease) in net assets resulting from share transactions 833,228,289 634,818,822
TOTAL INCREASE (DECREASE) IN NET ASSETS 740,185,655 744,005,137
NET ASSETS
Beginning of period 757,737,144 13,732,007
End of period (including under (over) distribution of net investment income of $(71,187)
and $628,805, respectively) $ 1,497,922,799 $ 757,737,144
OTHER INFORMATION
Shares
Sold 117,914,488 48,273,320
Issued in reinvestment of distributions 178,390 26,476
Redeemed (74,838,104) (2,719,187
)
Net increase (decrease) 43,254,774 45,580,609
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S>
<C> <C> <C> <C>
SIX MONTHS ENDED YEARS ENDED OCTOBER 31, NOVEMBER 1, 1990
APRIL 30, 1994 1993 1992 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
OCTOBER 31, 1991
SELECTED PER-SHARE DATA
Net asset value, beginning of period
$ 16.18 $ 11.05 $ 10.40 $ 10.00
Income from Investment Operations
Net investment income
.04 .06** .08 .12
Net realized and unrealized gain (loss) on investments
.32# 5.28 .76 .30
Total from investment operations
.36 5.34 .84 .42
Less Distributions
From net investment income
(.04) (.08) (.08) (.04)
In excess of net investment income
(.01) - - -
From net realized gain
- (.15) (.14) -
Total distributions
(.05) (.23) (.22) (.04)
Redemption fees added to paid in capital
.14 .02 .03 .02
Net asset value, end of period
$ 16.63 $ 16.18 $ 11.05 $ 10.40
TOTAL RETURN(dagger)(diamond)
3.08% 49.58% 8.56% 4.41%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted)
$ 1,497,923 $ 757,737 $ 13,732 $ 6,450
Ratio of expenses to average net assets
1.55%* 1.91% 2.60%(diamond) 2.60%(diamond)
Ratio of net investment income to average net assets
.33%* .44% .90% 1.34%
Portfolio turnover rate
215%* 57% 159% 45%
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE THE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN
ONE YEAR ARE NOT ANNUALIZED
(diamond) EXPENSES LIMITED IN ACCORDANCE WITH A STATE EXPENSE LIMITATION. TOTAL RETURNS WOULD HAVE BEEN LOWER
HAD THE LIMITATION NOT BEEN IN EFFECT.
** NET INVESTMENT INCOME PER SHARE HAS BEEN CALCULATED BASED ON AVERAGE SHARES OUTSTANDING DURING THE PERIOD.
# THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE AGGREGATE NET GAIN (LOSS) ON INVESTMENTS
FOR THE PERIOD ENDED DUE TO THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND.
</TABLE>
LATIN AMERICA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Latin America
Fund has a 3% sales charge, which has been waived since the fund's start on
April 19, 1993 through May 31, 1994.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
LATIN AMERICA 4.31% 39.36% 38.53%
Morgan Stanley Latin
America Free Index 16.90% 50.45% 43.95%
Average Latin America Fund 9.07% 39.45% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on April 19, 1993. You can compare the fund's figures to the
performance of the Morgan Stanley Latin America Free index, a broad measure
of the performance of stocks in Latin American markets weighted by each
country's market capitalization (or the total value of the shares
outstanding). You can also compare the fund's performance to the average
Latin American fund, which reflects the performance of 11 funds with
similar objectives - in this case, a very small peer group - tracked by
Lipper Analytical Services. These benchmarks include reinvested dividends
and capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
LATIN AMERICA 39.36% 37.09%
Morgan Stanley Latin
America Free Index 50.45% 42.29%
Average Latin American Fund 39.45% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Latin America (349) MS Latin America Free
04/19/93 10000.00 10000.00
04/30/93 9940.00 9568.13
05/31/93 10180.00 9818.14
06/30/93 10700.00 10436.73
07/31/93 11070.00 10716.71
08/31/93 12110.00 11640.43
09/30/93 12330.00 11844.71
10/31/93 13280.00 12314.07
11/30/93 14290.00 13120.91
12/31/93 16208.50 14784.37
01/31/94 17507.19 17217.49
02/28/94 16591.06 16719.16
03/31/94 14909.80 15584.66
04/30/94 13862.80 14395.32
Let's say you invested $10,000 in Fidelity Latin America Fund on its start
date. By April 30, 1994, it would have grown to $13,853 - a 38.53% increase
on your initial investment. That compares to $10,000 invested in the Morgan
Stanley Latin America Free index, which would have grown to $14,395 over
the same period - a 43.95% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
LATIN AMERICA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Patti Satterthwaite,
Portfolio Manager of Fidelity Latin America Fund
Q. PATTY, HOW DID THE FUND DO?
A. It was a very volatile half year for Latin American markets and for the
fund. The fund's total return for the six months ended April 30, 1994, was
4.31%. That trailed its benchmark - the Morgan Stanley Latin America Free
index - which returned 16.90% during the same period. The average Latin
America fund returned 9.07%, according to Lipper Analytical Services. For
the 12 months ended April 30, the fund returned 39.36%, compared to 50.45%
for the index and 39.45% for the average fund.
Q. YOU MENTIONED THAT IT WAS A PARTICULARLY UNSTABLE PERIOD. WHAT HAPPENED?
A. Characterize it as the tale of two halves. From the end of October
through February 16, the fund had a total return of 38.05%, compared to
51.61% for the index. However, from that point through the end of April,
the fund's share price fell 24.44%, compared to a 22.89% drop for the
index. Obviously, the story was positive during the first three months.
Throughout Latin America, economies and political systems were relatively
stable, and the trend toward privatization of business continued. Compania
Siderurgica Nacional - the largest steel producer in Brazil - is a good
example of a company that began operating much more efficiently under
private ownership than it had as a state-owned business. In addition, other
factors fueled the markets. Both the passage of the North American Free
Trade Agreement (NAFTA) in mid-November and large inflows of foreign cash
into the Latin American markets helped drive up stock prices.
Q. WHY DID THE FUND TRAIL THE INDEX DURING THOSE THREE MONTHS?
A. The fund's strong performance from its start date in April 1993
attracted scores of new investors. The fund nearly quadrupled in size -
growing from nearly $343 million in assets to more than $1.3 billion - from
the end of October through mid February. I invested the new cash as quickly
as I could. However, with stock prices rising that quickly, anything less
than being fully invested in stocks was a drag on performance.
Q. WHAT FINALLY TRIPPED UP THE LATIN AMERICAN MARKETS FROM FEBRUARY THROUGH
APRIL?
A. There were several factors. As a backdrop, remember that stocks in the
region had risen so high so quickly, they were especially sensitive to any
negative news that might prompt investors to sell. That said, the first
tremor to shake the Latin American markets hit in early January when
Chiapas peasants staged a surprisingly strong uprising in southern Mexico.
Then, in early February, the Federal Reserve Board raised short-term
interest rates in the United States for the first time in five years. That
triggered a severe sell-off in the U.S. bond market, which quickly spread
to Latin America. Investors sold emerging market bonds at dizzying speeds,
and the negative market psychology spilled over into stocks. Finally, on
March 23, Mexico's leading presidential candidate was assassinated, which
made an already deteriorating investing environment worse.
Q. YOU REDUCED THE FUND'S STAKE IN BONDS FROM 19.1% AT THE END OF OCTOBER
TO 5.1% BY THE END OF APRIL. DID THAT HELP?
A. It did. I sold most of the fund's bond investments in the fall, in part,
because Latin American bond prices had risen so much in 1993. I didn't feel
there could be much more upside left. However, I did keep a portion of
these investments, which helped maintain the fund's liquidity when its
assets dropped by 50% from mid February through the end of April.
Q. IN HINDSIGHT, WOULD YOU HAVE DONE ANYTHING DIFFERENTLY WHEN THE MARKETS
BEGAN THEIR SLIDE?
A. Sure. I would have had a larger percentage of the fund's investments in
Brazil. Brazilian stocks eventually corrected in April and further in May,
after the period ended. But their prices kept increasing while those in
other Latin American markets were falling in February and March. Investors'
speculation about a newly announced plan to bring down Brazil's high
inflation helped drive the market. But I had reasons for keeping the fund's
stake in Brazilian stocks - 12.6% at the end of January - smaller than
Brazil's share of the index, which is roughly 27%.
Q. WHAT WERE YOU THINKING?
A. First, Brazil has elections coming up later this year. A far-left
candidate who has said he wants to stop the privatization of business was
leading in the polls, and I worried about what effect his candidacy might
have on the Brazilian market. In addition, Brazilian stocks aren't usually
as easy to buy and sell as those in some other Latin American markets such
as Mexico. So given the volatility in the markets, the fact that a large
number of the fund's shareholders were redeeming their shares at one time,
and my concerns about the Brazilian market, I felt that underweighting the
fund's investment in Brazil relative to the index was appropriate. I bought
more stocks in Mexico, which corrected in February and March. But despite
that downturn, several of the fund's top investments in Mexico outperformed
the index over the past six months.
Q. WHAT WERE SOME OF THE WINNERS?
A. Mexican conglomerate Grupo Carso - the fund's largest investment at the
end of April - was up nearly 30% for the six months. The company is tied to
several industries - including autos, mining and retail - that should
benefit most from NAFTA's passage. In addition, the company is known for
acquiring companies and turning them around, and I believe its management
is among the most effective in the world. Telefonos de Mexico - Mexico's
telephone company - also remained in the fund's top 10 investments through
the period. The company's stock price rose 7% over the past six months.
It's also one of the most easily traded stocks in the Mexican market, which
again helped the fund's liquidity. Finally, Grupo Sidek - a holding company
for steel and tourism businesses - is another Mexican stock that I'm very
optimistic about. Demand has been rising for steel used in new
construction, and the tourism industry is growing. Surprisingly, there are
still more hotel rooms in Orlando, Florida, than there are in all of
Mexico. However, Grupo Sidek is gaining market share as new hotels sprout
up on both of Mexico's coasts.
Q. LET'S TALK ABOUT THE COMING SIX MONTHS. WHAT'S YOUR OUTLOOK?
A. Despite the recent drop in Latin American markets, I still believe
strongly in the region's long-term prospects. Economies are experiencing
solid growth, businesses are succeeding at privatization, and political
systems appear to be moving toward stability. That said, I think volatility
during any short period could be the norm. And the coming six months is no
exception.
Q. WHY?
A. This is election year in two of the region's largest countries: Brazil
and Mexico. Uncertainty surrounding the outcome of these elections could
make for some turbulent markets. Also, there's the U.S. interest rate
question. If U.S. rates keep rising, it could have a negative effect on
U.S. stocks. And regardless of existing conditions in places like Mexico,
Brazil or Argentina, the activity of the U.S. markets always plays a big
role in determining investor sentiment in Latin America. As always, a
long-term approach to investing in Latin America makes it easier to ride
out the peaks and valleys.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in Latin American
securities
START DATE: April 19, 1993
SIZE: as of April 30, 1994, more than $646 million
MANAGER: Patti Satterthwaite, since April
1993; assistant manager, Latin American
portion of Fidelity Emerging Markets Fund,
since 1990; securities and Latin American
analyst, 1986-1990; joined Fidelity in 1986
(checkmark)
PATTI SATTERTHWAITE ON UNCERTAINTY IN '94:
"Everyone who invests in Latin America would like to
think the worst is over for this year. My feeling is that
even if the region ends the year on an up note, it may
experience a rough ride along the way. Uncertainty is
the watchword in Latin America. Venezuela and
Chile have new governments. And elections are
upcoming in Colombia, Brazil and Mexico. The latter
two are the big events. In Mexico, the PRI party had
to reorganize after the assassination of Colosio, its
presidential candidate, in March. The party has
chosen a new candidate who appears to be rising in
the polls, though it's still early in his candidacy. For
Mexican stocks to do well, I believe investors have to
be confident that the party will win.
"In Brazil, a left-wing candidate who opposes many
of the reforms that have boosted Brazilian stocks
lately is leading at the polls. I don't believe this
candidate will win, but I'm holding off increasing the
fund's investments in Brazil until I'm more certain of
the outcome. His opponent is the former economic
minister who put together the government's recent
plan to fight inflation. If it works, Brazil's inflation rate
should quickly fall from 40% a month inflation to
under 5% a month. That would definitely attract the
attention of Brazilian voters."
(bullet) The fund has an 18.4% stake in Argentina, down
from 22.2% six months ago. The country doesn't hold
its elections until next year. In addition, strong
economic growth and very low inflation could bode
well for the nation's stock market.
(bullet) The fund's investment in cash and bonds has
dropped from 24.0% at the end of October to 13.8%
at the end of April.
LATIN AMERICA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 9.1%
Row: 1, Col: 1, Value: 9.1
Row: 1, Col: 2, Value: 2.5
Row: 1, Col: 3, Value: 3.9
Row: 1, Col: 4, Value: 42.9
Row: 1, Col: 5, Value: 4.9
Row: 1, Col: 6, Value: 18.3
Row: 1, Col: 7, Value: 18.4
Panama 2.5%
Argentina 18.4%
Other 3.8%
Brazil 18.5%
Mexico 42.8%
Chile 4.9%
AS OF OCTOBER 31, 1993
United States 7.0%
Row: 1, Col: 1, Value: 7.0
Row: 1, Col: 2, Value: 2.9
Row: 1, Col: 3, Value: 44.6
Row: 1, Col: 4, Value: 4.4
Row: 1, Col: 5, Value: 18.9
Row: 1, Col: 6, Value: 22.2
Other 2.9%
Argentina 22.2%
Mexico 44.6%
Brazil 18.9%
Chile 4.4%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 84.7 73.7
Bonds 5.1 19.1
Short-term and
other investments 10.2 7.2
TOP TEN STOCKS
<TABLE>
<CAPTION>
<S> <C> <C>
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Grupo Carso SA de CV Class A-1 (Mexico, Conglomerates)
4.8 3.8
Telefonos de Mexico SA sponsored ADR representing shares Ord. Class L (Mexico, Telephone Services)
3.4 3.2
Cemex SA, Series B
(Mexico, Building Materials) 3.0 4.0
Grupo Sidek SA de CV Class B Ord. (Mexico, Credit & Other Finance)
2.6 1.0
Banacci SA de CV Class C
(Mexico, Banks) 2.3 1.2
Compania Siderurgica Nacional (Brazil, Iron & Steel)
2.1 1.4
YPF Sociedad Anonima sponsored ADR representing Class D shares (Argentina, Oil & Gas)
2.0 2.7
Tolmex B2 SA
(Mexico, Building Materials) 1.9 2.2
Grupo Financiero Serfin sponsored ADR
(Mexico, Banks)
1.8 -
Perez Companc Class B
(Argentina, Chemicals & Plastics) 1.8 1.1
</TABLE>
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Finance 21.1 12.8
Utilities 17.3 15.5
Basic Industries 11.8 9.1
Nondurables 11.8 10.8
Construction & Real Estate 8.4 9.4
Energy 5.1 4.5
Retail & Wholesale 4.7 7.4
Durables 3.9 3.8
Media & Leisure 2.5 2.6
Transportation 0.3 0.8
LATIN AMERICA
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 84.7%
SHARES VALUE (NOTE 1)
ARGENTINA - 15.2%
Astra Comp Argentina de Petroleum (Reg.) 2,549,200 $ 5,747,197 04699B94
Bagley Y Cia Ltd. SA (b) 481,119 1,856,022 05699C22
Banco de Galicia Y Buenos Aires SA
sponsored ADR representing Class B
shares (New) 220,475 6,696,961 05953820
Banco del Sud SA 164,400 2,734,510 05957M92
Banco Frances del Rio PL (Reg.) 647,756 5,757,113 21199692
Buenos Aires Embotelladora sponsored
ADR 119,200 4,097,500 11942420
Central Costanera SA ADR (c) (b) 137,000 4,110,000 15324M10
Central Puerto SA ADR (c) 13,100 491,250 15503810
Citicorp Equity Investment Class B 36,800 224,930 17399P22
Commercial del Plata (b) 697,790 3,845,535 20199392
Interamericania de Auto Ord. 713,423 9,793,479 26899722
Molinos Rio de La Plata (Reg.) 789,692 9,732,678 60899C22
Perez Companc Class B (b) 2,303,925 11,542,710 71399723
Telecom Argentina Stet France Class B 2,033,400 11,165,359 90899992
Telefonica Argentina Class B 1,271,200 8,050,090 87999D92
YPF Sociedad Anonima sponsored ADR
representing Class D shares 523,300 12,951,675 98424510
98,797,009
BRAZIL - 17.0%
Acesita (Acos Espec Itabira) Ord. 36,240,900 1,664,392 00499L22
Aracruz Celulose SA ADR (b) 263,700 3,592,913 03849610
BR Distribuidora PN (Pfd. Reg.) 19,503,000 584,115 11299622
Bradesco PN 308,055,466 3,856,311 10599992
Brahma (Cia Cervejaria) PN:
(New) 887,454 210,603 15799496
(Pfd. Reg.) Class B 24,194,800 5,741,668 15799492
(warrants) (b) 1,510,428 68,437 15799494
Brasmotor PN 23,087,000 6,560,317 10599892
Casa Anglo PN Ord. (b) 730,000 151,373 13599392
Celedsc PN B Ord. (b) 5,371,000 3,217,402 15199E22
Comp Paulista de Forca Luz Ord. 59,873,597 2,437,063 20499922
Compania Siderurgica Nacional (b) 522,040,000 13,911,976 24499523
Copene Petro Do Nordeste SA (b) 2,070,000 723,361 21799722
Coteminas PN 17,757,710 4,814,115 22199692
Duratex Corp. PN 19,017,000 874,831 26699493
Electrobras PN B (b) 22,017,200 4,785,218 69699993
IOCHP Maxion Ord. 1,000,000 453,110 46199F22
Itaubanco PN (Pfd. Reg.) 9,180,000 1,833,062 46599A92
Klabin Papel E Celulose 284,000 567,083 45599A22
Light (Servicos de Electric) SA Ord. (b) 27,019,900 8,134,190 53299892
Marco Polo PN Ord. B 4,052,000 933,581 56699692
Minas Gerais State (warrants) (b) 2,000 80,000 60251711
Moinho Santista Gerais Ord. 175,000 615,543 60899F22
Petrobras PN (Pfd. Reg.) (b) 102,484,000 9,838,336 71699794
Souza Cruz Industria Comerico (b) 28,000 180,631 84599D92
Telebras ON 197,250,000 5,695,875 95499795
Telebras PN (Pfd. Reg.) 290,085,000 10,459,633 95499792
Telepar 7,029,944 1,511,719 87999F22
Telerj SA PN 1,747,000 120,753 87999N22
Telesp ON (Telecom de Sao Paulo) 290,000 74,611 87999B98
Telesp PN (Telecom de Sao Paulo)
(Pfd. Reg.) 33,085,000 10,290,624 87999B93
Unibanco-Uniao Brasileiros PN 17,780,000 1,256,247 90599A94
Unibanco-Uniao Brasileiros PN
(rights) (b) 1,979,936 22,809 90599A96
Usiminas PN (Pfd. Reg.) 4,787,788,000 4,706,526 97199693
Vidraria Santa Marina Cia 179,600 634,482 92699992
110,602,910
SHARES VALUE (NOTE 1)
CHILE - 4.9%
Chile Fund, Inc. 48,056 $ 2,174,534 16883410
Comp Cervecerias Unidas SA ADR 494,600 10,695,725 20442910
Compania de Telefonos de Chile SA
sponsored ADR (b) 25,300 2,277,000 20444920
Cristalerias de Chile SA sponsored ADR 105,200 2,340,700 22671410
Enersis SA sponsored ADR (b) 292,900 6,004,450 29274F10
Madeco SA ADR (b) 123,000 3,567,000 55630410
Maderas Y Sinteticos Sociedad Anonima
Masisa sponsored ADR (b) 81,600 1,917,600 55646510
Soc. Quimica Y Minera de Chile
ADR (b) 82,100 2,586,150 83363510
31,563,159
COLOMBIA - 0.3%
Banco Ganadero SA ADR (c) 73,800 1,697,400 05959410
LUXEMBOURG - 0.2%
Quilmes Industries SA 64,950 1,321,732 74899692
MEXICO - 42.5%
Banacci SA de CV:
Class B (b) 513,000 3,142,417 06399896
Class C 2,173,800 14,747,211 06399893
Bufete Industrial SA sponsored ADR
representing 3 ordinary certificates
Banco (b) 87,800 2,535,225 11942H10
Cementos Apasco SA de CV
Class A (b) 852,300 7,309,154 15299392
Cemex SA, Series B 905,900 19,644,016 15299293
Cifra SA Class C (b) 4,028,100 10,437,290 17178594
Coca-Cola Femsa SA de CV sponsored
ADR (b) 95,400 3,028,950 19124110
Controladora Commercial Mexicana
SA B-1 (b) 900 1,560 21299692
Desc (Soc. de Fomento Indus.) Class B 1,434,300 8,961,635 25299692
Empaques Ponderosa SA B Ord. 192,000 458,682 29157892
Empresas Ica Sociedad Controladora SA
de CV sponsored ADR representing
Ord. Part. Cert. 314,100 7,459,875 29244810
Empresas La Moderna SA sponsored
ADR 56,100 1,437,563 29244910
Emvasa del Valle de Enah Ord. (b) 2,206,100 8,851,425 29299E22
Farmacia Benevides SA de CV
Ord. (b) 1,624,200 7,859,829 31299422
Fomento Economico Mexicano SA
(FEMSA) B 1,223,000 5,693,603 34441892
Fondo Opcion SA de CV Class 2,
Series B (b) 142,000 378,376 34499892
Gruma SA Class B 93,300 595,531 21030610
Grupo Carso SA de CV Class A-1 (b) 3,112,300 31,027,670 40099594
Grupo Dina (Consorcio G) ADR (b) 188,900 2,432,088 21030610
Grupo Embotellador de Mexico CPO 271,600 3,776,612 30599422
Grupo Financiero Bancomer SA de CV
sponsored ADR, Series C (c) 439,800 10,830,075 40048610
Grupo Financiero GBM Atantico SA de
CV sponsored ADR (c) 35,100 623,025 40048F10
Grupo Financiero Inbursa Class C 370,000 1,529,861
Grupo Financiero Serfin sponsored
ADR (b) 535,400 11,778,800 40049A10
Grupo Industrial Alfa SA Class A 156,000 1,313,935 44499692
Grupo Industrial Bimbo SA de CV Ord.,
Series A (b) 311,765 2,606,795 60899995
Grupo Industrial Maseca SA de CV
Class B (b) 2,416,200 4,010,964 57899894
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
MEXICO - CONTINUED
Grupo Mexicano de Desarrollo Class L
ADR (b) 170,500 $ 2,791,938 40048G20
Grupo Posadas SA de CV Ord. (b) 1,520,000 1,368,699 40048993
Grupo Radio Centro SA de CV
sponsored ADR (b) 110,200 2,507,050 40049C10
Grupo Sidek SA de CV Class B Ord. 3,825,900 16,756,639 40099F22
Grupo Simec SA de CV ADR (b) 86,900 1,748,863 40049110
Grupo Situr SA de CV Class B (b) 2,935,445 7,767,921 40049292
Grupo Televisa SA de CV (b) 63,500 1,672,588 40049J97
Grupo Televisa GDS (c) 45,300 2,400,900 40049J20
Grupo Tribasa SA de CV sponsored
ADR (b) 80,572 1,974,014 40049F10
Herdez SA de CV Class A (b) 1,567,900 1,637,530 42799F22
Kimberly Clark de Mexico Class A 517,600 9,733,734 49499392
Sanluis Corp. Ord., Series A-2 (b) 460,200 3,551,925 21987020
Sears Roebuck de Mexico SA (b) 627,300 8,319,171 81240K92
Servicios Financieros Quadrum SA
sponsored ADR (b) 21,700 390,600 81763810
Telefonos de Mexico SA sponsored ADR
representing shares Ord. Class L 380,100 22,378,388 87940378
Tolmex B2 SA (b) 1,053,700 12,683,123 94399492
Transport Maritima Mexicana:
A (b) 104,500 800,153 94899592
Class L 36,000 330,781 94899593
Transportacion Maritima Mexicana SA
de CV ADR representing L share (b) 87,100 707,688 89386820
Vitro SA (b) 624,800 4,152,577 92850292
Vitro SA sponsored ADR (b) 500 10,000 92850230
276,156,449
PANAMA - 2.3%
Banco Latinoamericano de Exportaciones
SA Class E (b) 159,900 6,076,200 06199A92
Panamerican Beverages, Inc. Class A 264,100 9,078,438 69829W10
15,154,638
PERU - 1.5%
Banco de Credito del Peru T shares 766,800 2,064,532 06899B22
Banco Wiese Ltd. 13,000 116,412 05999T22
Compania Peruana Telefonos T shares 491,600 3,037,916 24499622
La Fabril SA T shares 759,900 1,745,695 50399B23
Minsur SA T shares 110,149 875,524 60499F22
Southern Peru Copper Corp. T shares 456,204 1,402,252 84399F22
Tele 2000 SA 215,000 710,246 87999M22
9,952,577
UNITED STATES OF AMERICA - 0.3%
Duty Free International, Inc. 153,900 2,116,125 26708410
VENEZUELA - 0.5%
Electricidad de Caracas LA (b) 737,665 1,762,976 42799922
Mavesa SA sponsored ADR (c) 334,266 1,796,680 57771720
3,559,656
TOTAL COMMON STOCKS
(Cost $573,051,580) 550,921,655
CORPORATE BONDS - 0.7%
MOODY'S RATINGS PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
CONVERTIBLE BONDS - 0.1%
PHILIPPINES - 0.1%
International Container
Terminal Services, Inc.
unsecured 6%, 2/19/00 (c) - $ 400,000 $ 560,000 459360AA
NONCONVERTIBLE BONDS - 0.6%
ARGENTINA - 0.0%
Petrolera Argentina San Jorge
SA euro 11%, 2/9/98 - 250,000 259,687 71654P9A
BRAZIL - 0.4%
Telebras 17 1/2%, 7/1/05 - BRC 132,857,816 2,730,308 954997AE
MEXICO - 0.2%
Bancomer SA 9%, 6/1/00 (c) - 500,000 478,750 059682AA
Citibank Mexico euro
13.6087%, 6/25/94 (d) - 100,000 100,000 17699AAF
First Mexican Acceptance Corp.
euro 10 3/4%, 9/15/96 - 500,000 503,390 321998AA
1,082,140
TOTAL NONCONVERTIBLE BONDS 4,072,135
TOTAL CORPORATE BONDS
(Cost $4,399,501) 4,632,135
GOVERNMENT OBLIGATIONS (G) - 4.4%
ARGENTINA - 3.2%
Argentina Republic:
BOCON:
3.24%, 4/1/01 (d) - ARP 5,851,511 3,537,877
3.24%, 9/1/02 (d) - ARP 3,910,160 1,941,007 039995AJ
3.24%, 4/1/07 (d) - ARP 25,362,804 10,764,783 039995AW
Brady 4%, 3/31/23 (c) - 250,000 132,187 0401149Y
5%, 3/31/05 (c)(d) - 250,000 182,187 039995AT
Province of Chaco 11 7/8%,
9/10/97 (e) - 2,600,000 2,580,500 74399JAA
Province of Cordoba 10%,
1/28/95 - 2,000,000 1,962,500 74399HAC
21,101,041
BRAZIL - 1.1%
Brazil, Federative Republic euro
5 1/4%, 4/15/12 (d) - 2,040,000 1,425,000 74399JAA
Siderurgica Brasileiras SA
inflation indexed 6%,
8/15/99 (f) - BRC 43,398,700 5,620,171 82599PAA
7,045,171
MEXICO - 0.1%
Mexican Government Brady
6.63%, 12/31/19 Ba2 FRF 4,500,000 489,131 597998VQ
TOTAL GOVERNMENT OBLIGATIONS
(Cost $39,975,524) 28,635,343
OTHER SECURITIES - 1.5%
MOODY'S PRINCIPAL VALUE (NOTE 1)
RATINGS (D) AMOUNT (A)
INDEXED SECURITIES - 0.1%
UNITED STATES OF AMERICA - 0.1%
Morgan Guaranty Trust Co.
cert. of dep. 0%, 8/22/94
(indexed to $481 par of
Westport Investments Ltd. sr.
notes, collateralized by
Mexican govt. securities
per $100 par) $ 500,000 $ 497,250 61799FAF
PURCHASED BANK DEBT - 1.4%
COLOMBIA - 0.1%
Republic of Colombia
amortizing loan participation
6 3/8%, 1/31/98 (d) 356,268 321,532 1953259E
ECUADOR - 0.4%
Republic of Ecuador loan
participation (b):
thru Kidder Peabody
Emerging Markets, Inc. 0% 3,500,000 1,505,000 88399HAA
0% 2,500,000 1,000,000 88399HAB
2,505,000
PANAMA - 0.2%
Republic of Panama loan
participation under
refinancing
agreement 0% (b) 3,750,000 1,612,500 6982999B
PERU - 0.7%
Empressa de Electricidad del Peru
SA loan participation 0% (b) 9,750,000 3,168,750
Republic of Peru loan
participation (b):
refinanced under 1983
credit agreement 0% 1,250,000 481,250 7156389B
0% 3,250,000 1,194,375 7156389A
4,844,375
TOTAL PURCHASED BANK DEBT 9,283,407
TOTAL OTHER SECURITIES
(Cost $16,990,496) 9,780,657
CERTIFICATES OF DEPOSIT - 0.0%
GRAND CAYMAN - 0.0%
Ridgefield Investments Ltd. 0%,
2/2/95 (c) (Cost $2,530,000) 3,660,000 299,754 76599AAB
REPURCHASE AGREEMENTS - 8.7%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a
joint trading account at 3.56% dated
4/29/94 due 5/2/94 $ 56,205,669 $ 56,189,000
TOTAL INVESTMENTS IN SECURITIES - 100%
(Cost $693,136,101) $ 650,458,544
CURRENCY ABBREVIATIONS
ARP - Argentinean peso
BRC - Brazilian cruzeiro
FRF - French franc
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $23,602,208 or 3.7% of net
assets.
4. The coupon rate shown on floating or adjustable rate securities
represents the rate at period end.
5. Restricted securities - investment in securities not registered under
the Securities Act of 1933 (see Note 2 of Notes to Financial Statements).
Additional information on each holding is as follows:
ACQUISITION ACQUISITION
SECURITY DATE COST
Province of Chaco 1 7/8%,
9/10/97 3/9/94 $ 2,678,975
6. Principal amount shown is original face amount and does not reflect the
inflation adjustments.
7. Most foreign government obligations have not been individually rated by
S&P or Moody's. The ratings listed are assigned to securities by FMR,
the fund's investment adviser, based principally on S&P and Moody's
ratings of the sovereign credit of the issuing government.
OTHER INFORMATION
At the end of the period, restricted securities (excluding 144A issues)
amounted to $2,580,500 or 0.4% of net assets.
Purchases and sales of securities, other than short-term securities,
aggregated $722,942,720 and $410,103,573, respectively.
The following is a summary of the fund's written options activity:
AGGREGATE
NUMBER OF FACE VALUE
CONTRACTS OF CONTRACTS
Call Options on Republic of Venezuela
Debt Conversion Bonds:
Outstanding at November 1, 1993 - -
Contract opened 1 $ 1,000,000
Contract closed (1) (1,000,000)
Outstanding at April 30, 1994 - $ -
The fund placed a portion of its portfolio transactions with brokerage
firms which are affiliates of FMR. The commissions paid to these affiliated
firms were $51,774 for the period (see Note 4 of Notes to Financial
Statements).
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $17,304,000 and $12,064,625,
respectively. The weighted average interest rate was 3.66%. Interest earned
from the interfund lending program amounted to $9,814 and is included in
interest income on the Statement of Operations (see Note 2 of Notes to
Financial Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $6,884,000 and $6,884,000, respectively. The
weighted average interest rate was 4.0%. Interest expense includes $765
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $693,136,512. Net unrealized depreciation aggregated
$42,677,968, of which $43,018,353 related to appreciated investment
securities and $85,696,321 related to depreciated investment securities.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 11.8%
Construction & Real Estate 8.4
Durables 3.9
Energy 5.1
Finance 21.1
Government Obligations 4.4
Media & Leisure 2.5
Nondurables 11.8
Repurchase Agreements 8.7
Retail & Wholesale 4.7
Transportation 0.3
Utilities 17.3
100.0%
LATIN AMERICA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $56,189,000) (cost $693,136,101) $ 650,458,544
(Notes 1 and 2) - See accompanying schedule
Cash 393,104
Receivable for investments sold 4,813,327
Receivable for fund shares sold 16,947,367
Dividends receivable 525,053
Interest receivable 407,600
Redemption fees receivable (Note 1) 1,594
TOTAL ASSETS 673,546,589
LIABILITIES
Payable for investments purchased $ 22,003,975
Payable for fund shares redeemed 1,464,163
Accrued management fee 408,622
Other payables and accrued expenses 3,354,272
TOTAL LIABILITIES 27,231,032
NET ASSETS $ 646,315,557
Net Assets consist of (Note 1):
Paid in capital $ 664,634,018
Undistributed net investment income 296,522
Accumulated undistributed net realized gain (loss) on investments 24,062,574
Net unrealized appreciation (depreciation) on investment securities (42,677,557
)
NET ASSETS, for 46,976,866 shares outstanding $ 646,315,557
NET ASSET VALUE, offering price and redemption price per share ($646,315,557 (divided by) 46,976,866 shares)(Note 4) $13.76
Maximum offering price per share (100/97.00 of $13.76) (Note 4) $14.19
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 3,599,967
Dividends
Interest 4,206,122
Foreign exchange gain (loss) (198,052
)
7,608,037
Less foreign taxes withheld (Note 1) (115,246
)
TOTAL INCOME 7,492,791
EXPENSES
Management fee (Note 4) $ 3,030,873
Transfer agent fees 1,942,255
Fees (Note 4)
Redemption fees (Note 1) (182,014
)
Accounting fees and expenses 191,178
(Note 4)
Non-interested trustees' compensation 2,130
Custodian fees and expenses 769,858
Registration fees 154,016
Audit 21,238
Legal 3,049
Interest (Note 5) 765
Miscellaneous 1,912
Total expenses before reductions 5,935,260
Expense reductions (Note 6) (4,438 5,930,822
)
NET INVESTMENT INCOME 1,561,969
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTES 1 AND 2)
Net realized gain (loss) on:
Investment securities 24,327,693
Written options 21,000 24,348,693
Change in net unrealized appreciation (depreciation) on investment securities (75,049,515
)
NET GAIN (LOSS) (50,700,822
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (49,138,853
)
OTHER INFORMATION
Accounting fees paid to FSC $189,809
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS APRIL 19, 1993
ENDED APRIL 30, (COMMENCEMEN
1994 T
(UNAUDITED) OF OPERATIONS)
TO
OCTOBER 31,
1993
<TABLE>
<CAPTION>
<S> <C> <C>
Operations $ 1,561,969 $ 750,722
Net investment income
Net realized gain (loss) on investments 24,348,693 1,877,469
Change in net unrealized appreciation (depreciation) on investments (75,049,515 32,371,958
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (49,138,853 35,000,149
)
Distributions to shareholders (1,988,187 -
From net investment income )
From net realized gain (1,988,188 -
)
TOTAL DISTRIBUTIONS (3,976,375 -
)
Share transactions 1,136,566,639 360,615,904
Net proceeds from sales of shares
Reinvestment of distributions 3,877,585 -
Cost of shares redeemed (789,523,302 (53,208,347
) )
Redemption fees (Note 1) 5,576,231 525,926
Net increase (decrease) in net assets resulting from share transactions 356,497,153 307,933,483
TOTAL INCREASE (DECREASE) IN NET ASSETS 303,381,925 342,933,632
NET ASSETS
Beginning of period 342,933,632 -
End of period (including undistributed net investment income of $296,522 and $750,722, respectively)$ 646,315,557 $ 342,933,632
OTHER INFORMATION
Shares
Sold 71,528,070 30,145,557
Issued in reinvestment of distributions 261,275 -
Redeemed (50,643,222 (4,314,814
) )
Net increase (decrease) 21,146,123 25,830,743
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA SIX MONTHS ENDED APRIL 19, 1993
APRIL 30, 1994 (COMMENCEMENT
(UNAUDITED) OF OPERATIONS) TO
OCTOBER 31, 1993
Net asset value, beginning of period $ 13.28 $ 10.00
Income from Investment Operations
Net investment income .03 .03
Net realized and unrealized gain (loss) on investments .44# 3.23
Total from investment operations .47 3.26
Less Distributions
From net investment income (.05) -
From net realized gain (.05) -
Total distributions (.10) -
Redemption fees added to paid in capital .11 .02
Net asset value, end of period $ 13.76 $ 13.28
TOTAL RETURN(dagger) 4.31% 32.80%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 646,316 $ 342,934
Ratio of expenses to average net assets 1.54%* 1.94%*
Ratio of net investment income to average net assets .41%* 1.21%*
Portfolio turnover rate 126%* 72%*
* ANNUALIZED
(dagger) TOTAL RETURNS DO NOT INCLUDE ONE TIME SALES CHARGE AND FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED.
# THE AMOUNT SHOWN FOR A SHARE OUTSTANDING DOES NOT CORRESPOND WITH THE AGGREGATE NET GAIN (LOSS) ON INVESTMENTS FOR
THE PERIOD ENDED DUE TO THE TIMING OF
SALES AND REPURCHASES OF FUND SHARES IN RELATION TO FLUCTUATING MARKET VALUES OF THE INVESTMENTS OF THE FUND.
</TABLE>
SOUTHEAST ASIA
PERFORMANCE: THE BOTTOM LINE
There are several ways to evaluate a fund's historical performance. You can
look at the total percentage change in value, the average annual percentage
change, or the growth of a hypothetical $10,000 investment. Each
performance figure includes changes in a fund's share price, plus
reinvestment of any dividends (income) and capital gains (the profits the
fund earns when it sells stocks that have grown in value). Southeast Asia
Fund has a 3% sales charge, which has been waived since the fund's start on
April 19, 1993 through May 31, 1994.
CUMULATIVE TOTAL RETURNS
PERIOD ENDED PAST 6 PAST 1 LIFE OF
APRIL 30, 1994 MONTHS YEAR FUND
SOUTHEAST ASIA -2.41% 29.86% 29.21%
Morgan Stanley Far East
ex-Japan Free Index 1.19% 38.83% 44.09%
Average Pacific Region Fund 2.35% 26.14% n/a
CUMULATIVE TOTAL RETURNS show the fund's performance in percentage terms
over a set period - in this case, six months, one year, or since the fund
started on April 19, 1993. You can compare the fund's figures to the
performance of the Morgan Stanley Far East ex-Japan Free index, a broad
measure of the performance of stocks in the Far East region, excluding
Japan. The index is weighted by each country's market capitalization (or
the total value of its outstanding shares). You can also compare the fund's
performance to the average Pacific region fund which reflects the
performance of 41 funds with similar objectives tracked by Lipper
Analytical Services. These benchmarks include reinvested dividends and
capital gains, if any, and exclude the effects of sales charges.
AVERAGE ANNUAL TOTAL RETURNS
PERIOD ENDED PAST 1 LIFE OF
APRIL 30, 1994 YEAR FUND
SOUTHEAST ASIA 29.86% 28.15%
Morgan Stanley Far East ex-Japan Free
Index 38.83% 42.42%
Average Pacific Region Fund 26.14% n/a
AVERAGE ANNUAL TOTAL RETURNS take the fund's actual (or cumulative) return
and show you what would have happened if the fund had performed at a
constant rate each year.
$10,000 OVER LIFE OF FUND
Southeast Asia (351)MS Combined Far East ex Japan Free
04/19/93 10000.00 10000.00
04/30/93 9950.00 10378.31
05/31/93 10390.00 10975.91
06/30/93 10140.00 10687.54
07/31/93 10130.00 10760.98
08/31/93 10870.00 11661.43
09/30/93 11210.00 12024.42
10/31/93 13240.00 14239.20
11/30/93 13650.00 14143.38
12/31/93 16487.62 17581.63
01/31/94 15151.33 16380.67
02/28/94 14437.97 15439.89
03/31/94 12599.31 13760.40
04/30/94 12920.83 14408.66
Let's say you invested $10,000 in Fidelity Southeast Asia Fund on its start
date. By April 30, 1994, it would have grown to $12,921 - a 29.21% increase
on your initial investment. That compares to $10,000 invested in the Morgan
Stanley Far East ex-Japan Free index, which would have grown to $14,409
over the same period - a 44.09% increase.
UNDERSTANDING PERFORMANCE
Many markets around the globe offer the
potential for significant growth over time;
however, investing in foreign markets means
assuming greater risks than investing in the
United States. Factors like changes in a
country's financial markets, its local political
and economic climate, and the fluctuating
value of its currency create these risks. For
these reasons an international fund's
performance may be more volatile than a fund
that invests exclusively in the United States.
(checkmark)
SOUTHEAST ASIA
FUND TALK: THE MANAGER'S OVERVIEW
An interview with Allan Liu,
Portfolio Manager of Southeast Asia
Q. HOW DID THE FUND PERFORM, ALLAN?
A. Not as well as I would have liked. For the six months and one year ended
April 30, the fund had total returns of -2.41% and 29.86%, respectively,
underperforming the Morgan Stanley Far East ex-Japan Free index, which had
total returns for the periods of 1.19% and 38.83%, respectively. The
average Pacific region fund, which returned 2.35% over the past six months,
also beat the fund, according to Lipper Analytical Services. However, over
the past year, the fund outperformed the average fund, which had a return
of 26.14%.
Q. BEFORE WE TALK ABOUT THE FUND'S RELATIVE PERFORMANCE, LET'S LOOK AT THE
BIG PICTURE IN SOUTHEAST ASIA . . .
A. The last six months have been a wild ride for investors in Southeast
Asia. As the numbers we just talked about show, 1993 was a great year for
these markets. Over the last few months of that year, returns were
extraordinary, with some stocks up 25% in December alone. Near the end of
1993, investors were willing to pay extremely high prices for stocks of
Southeast Asian companies with fast-growing earnings. However at the
beginning of 1994, these highly inflated stock prices led to a market
correction. It became clear that many stocks were over-bought - meaning
they had experienced a sharp price rise and were therefore vulnerable to a
price drop. Because valuations - stock prices compared to other measures
such as earnings - were so high, Southeast Asian stocks became less
attractive to investors. As a result, many investors started to look to
other markets, such as Japan, where stocks offered better opportunities.
Q. DID THIS ENVIRONMENT HURT THE FUND'S PERFORMANCE?
A. It helped and hurt it. I tend to invest in high-growth stocks, those of
companies with rapidly growing earnings. These stocks performed well in
1993. However, when the Southeast Asian market tumbled in early 1994,
growth stocks under-performed the market. As a cautious step, I have
slightly readjusted the fund's portfolio so it owns more defensive stocks.
Q. WERE THERE ANY OTHER REASONS THE FUND LAGGED THE INDEX OVER THE PAST SIX
MONTHS?
A. Yes. Probably the biggest reason was capital inflows to and outflows
from the fund. During the last few months of 1993, people invested huge
amounts of money in the fund, which made it difficult for me to keep the
fund as fully invested as I would have liked. As a result, I was holding
too much cash and not enough stocks during that period. On the other hand,
during the first quarter of this year, the fund had the opposite problem -
many investors, disappointed with the performance of Southeast Asian
markets, pulled their money out of the fund. As a result, I had to sell a
portion of the fund's investments to pay back investors. Unfortunately,
that included some well-performing Hong Kong stocks, simply because they
were my most liquid holdings.
Q. FUND MANAGERS IN SOUTHEAST ASIA OFTEN MENTION LIQUIDITY. WHAT DOES IT
MEAN?
A. It may be easier to define illiquid stocks. The fund has legal
restrictions, which prevent it from owning too many illiquid shares. To be
more specific, in some countries like Malaysia, I must physically deliver
the shares I'm buying to the registrar in order to change ownership. The
process takes from six to eight weeks. During this period, the shares are
considered illiquid. For conservative purposes, we also define illiquid
stocks as stocks in markets that have very low turnover. For example, we
consider stocks in the Philippines or Indonesia illiquid because, even
though there's a daily stock exchange, stocks don't change hands all that
frequently. As a result, it could take a week or so to sell a stock in one
of these markets.
Q. HONG KONG COMPANIES MADE UP SIX OF YOUR TOP 10 STOCKS. WHAT'S BEHIND
THIS?
A. I thought there were a lot of good values in Hong Kong on a price to
growth basis, and I remained upbeat on banks and property companies that
had a history of strong management. Some of my top property holdings there
are Cheung Kong Ltd., Sun Hung Kai Properties, and Hong Kong Land Holdings
Ltd. In addition, Hong Kong has the added excitement of being home to many
companies that are expanding in mainland China. I invested in big-cap
companies that had a strong base in Hong Kong but were cautiously exploring
the Chinese market. I emphasize "cautiously" because even though China's
economy is growing very rapidly, it is currently overheated, which means it
is experiencing a high rate of inflation.
Q. WHAT OTHER COUNTRIES HAD GOOD STORIES?
A. Malaysia has experienced strong economic growth for the past several
years, and it has been an especially good play on gaming. I was also
impressed with Technology Resources, for a long while the only player in
the Malaysian cellular phone market. Now competition in that industry is
growing, but I still believe Technology Resources will turn in a solid
performance. The company's management is quite strong, and even though it
will lose market share to competitors, the market is growing so fast that
it should more than make up any losses.
Q. AS YOU LOOK BACK, DO YOU REGRET ANY OF YOUR INVESTMENT DECISIONS?
A. As I said earlier, I wish the fund had not been so heavily invested in
high growth stocks when the market corrected in 1994. Another
disappointment was Malaysian Resources, a property company, which was
previously in the fund's top 10 and had the promise of solid government
contracts. Over the past six months, the company had problems executing
these contracts, which reflected a weakness in its technical expertise. In
addition, its quality of management turned out to be disappointing.
Q. WHAT DO YOU THINK SHAREHOLDERS CAN EXPECT OVER THE NEXT YEAR?
A. With the significant drop in the Southeast Asian markets, valuations -
or prices relative to other measures such as earnings - have returned to
fairly reasonable levels. As a result, the end of this period looked like
it might be a comfortable point of entry for long-term investors. While a
certain amount of volatility continues to exist, I'm generally optimistic
about the fund over the next 12 months.
FUND FACTS
GOAL: to increase the value of the fund's
shares by investing mainly in Southeast Asian
stocks, including those from Thailand, Hong
Kong, South Korea, Malaysia, Indonesia,
Singapore, the Philippines, China and Taiwan
START DATE: April 19, 1993
SIZE: as of April 30, 1994, more than $694 million
MANAGER: Allan Liu, since April 1993;
manager, various funds for non-U.S.
investors; analyst, Southeast Asian markets,
1987-1990
(checkmark)
ALLAN LIU ON THE RISKS AND REWARDS OF THE
SOUTHEAST ASIAN MARKET:
"Southeast Asian markets can be very volatile, as we
have seen over the last year. Like financial markets
around the world, the performance of markets in this
region is affected by company and economic
fundamentals. However, Southeast Asian markets
also are strongly influenced by the flow of money
from developed markets - especially the United
States, Europe and Japan. Keep in mind, heavy cash
flows in and out of the market can dramatically alter
its performance.
"Because of the market volatility in Southeast Asia,
this fund is set up largely for long-term investors, not
short-term investors trying to time the market. My
strategy is to invest largely in growth companies and
to continue to maintain a fully invested position. I try
to ride on the growth of the companies and countries I
expect to perform well over the long term.
"In general, the fund's investment style is bottom up,
which means it focuses on picking the right
companies, not necessarily the countries or
industries that look good. Case in point, while some
countries, such as Singapore, look attractive and
have strong regional exposure, the fund doesn't have
a large investment there because it's difficult to find
quality companies with strong earnings growth."
(bullet) As of April 30, 1994, the fund's top five countries
were Hong Kong (33.1%), Malaysia (18.9%), South
Korea (15.2%), Thailand (12.7%), and the United
States (7.4%).
(bullet) The fund's No. 1 stock was Hutchison Whampoa,
a large conglomerate based in Hong Kong that has
significant property holdings.
SOUTHEAST ASIA
INVESTMENT CHANGES
GEOGRAPHIC DIVERSIFICATION
AS OF APRIL 30, 1994
United States 7.4%
Row: 1, Col: 1, Value: 7.4
Row: 1, Col: 2, Value: 12.7
Row: 1, Col: 3, Value: 5.0
Row: 1, Col: 4, Value: 4.5
Row: 1, Col: 5, Value: 1.6
Row: 1, Col: 6, Value: 17.9
Row: 1, Col: 7, Value: 15.2
Row: 1, Col: 8, Value: 2.6
Row: 1, Col: 9, Value: 33.1
Thailand 12.7%
Hong Kong 33.1%
Singapore 5.0%
Philippines 4.5%
Other 0.6%
Indonesia 2.6%
Malaysia 18.9%
Korea (South) 15.2%
AS OF OCTOBER 31, 1993
United States 5.9%
Row: 1, Col: 1, Value: 5.9
Row: 1, Col: 2, Value: 18.0
Row: 1, Col: 3, Value: 6.8
Row: 1, Col: 4, Value: 3.1
Row: 1, Col: 5, Value: 1.5
Row: 1, Col: 6, Value: 16.6
Row: 1, Col: 7, Value: 11.1
Row: 1, Col: 8, Value: 37.0
Thailand 18.0%
Hong Kong 37.0%
Singapore 6.8%
Philippines 3.1%
Other 1.5%
Malaysia 16.6%
Korea (South) 11.1%
ASSET ALLOCATION
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Stocks 88.7 92.7
Bonds 3.9 1.4
Short-term investments 7.4 5.9
TOP TEN STOCKS
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Hutchison Whampoa Ltd. Ord.
(Hong Kong, Electrical Equipment) 3.7 1.8
Cheung Kong Ltd.
(Hong Kong, Real Estate) 3.6 -
Sun Hung Kai Properties Ltd.
(Hong Kong, Real Estate) 2.9 2.0
Swire Pacific Class A
(Hong Kong, Air Transportation) 2.6 0.7
Hong Kong Land Holdings Ltd.
(Hong Kong, Real Estate) 2.5 1.0
Philippine Long Distance
Telephone Co. 1.8 1.5
(Philippines, Telephone Services)
HSBC Holdings PLC
(Hong Kong, Banks) 1.6 3.8
Technology Resources
(Malaysia, Air Transportation) 1.6 1.4
Genting BHD
(Malaysia, Lodging & Gaming) 1.4 0.9
Resorts World BHD
(Malaysia, Lodging & Gaming) 1.4 0.7
TOP TEN INDUSTRIES
% OF FUND'S % OF FUND'S
INVESTMENTS INVESTMENTS
6 MONTHS AGO
Construction & Real Estate 24.5 20.5
Finance 22.7 21.6
Media & Leisure 8.3 9.8
Basic Industries 8.1 6.3
Utilities 7.0 8.6
Industrial Machinery & Equipment 6.6 5.8
Transportation 4.3 3.1
Durables 2.6 4.6
Nondurables 2.3 2.4
Retail & Wholesale 2.3 2.7
SOUTHEAST ASIA
INVESTMENTS APRIL 30, 1994 (UNAUDITED)
Showing Percentage of Total Value of Investment in Securities
COMMON STOCKS - 88.0%
SHARES VALUE (NOTE 1)
CHINA (PEOPLES REP.) - 0.1%
Yizheng Chemical Fibre Co. Class H (b) 3,350,000 $ 1,040,817 99599E22
GRAND CAYMAN - 0.1%
Four Seas Mercantile Holdings Ltd. 600,000 198,066 35099622
New Korea Growth Fund 50,000 612,500 64699722
810,566
HONG KONG - 33.1%
Acme Landis Holdings Ltd. 308,000 55,422 00499A92
Amoy Properties Ltd. 2,771,500 3,659,599 03199192
Amoy Properties Ltd. (warrants) (b) 2,100,000 999,068 03199195
Ankor Group Ltd. 728,000 97,100 03599822
Assoc. International Hotels (b) 1,040,000 1,043,406 04599492
Bank of East Asia 1,000,000 4,207,280 06199010
Beiren Printing Machinery Holding,
Series H 300,000 162,141 07799822
Cheung Kong Ltd. 5,420,000 25,610,056 16674410
China Light & Power Co. Ltd. 1,150,000 5,992,144 16940010
Chinese Estates Holdings Ltd. 3,700,000 3,664,221 06399J22
Chinese Estates Holdings Ltd.
(warrants) (b) 4,400,000 2,292,646 06399J23
Citic Pacific Ltd. Ord. 3,200,000 8,906,496 45299792
Culturecom Holdings Ltd. 24,742,000 2,786,586 23099322
Culturecom Holdings Ltd.
(warrants) (b) 8,148,400 259,493 23099324
Dah Sing Financial Holdings 440,000 1,389,828 23899892
Dao Heng Bank Group Ltd. 782,550 2,370,532 23799F22
First Pacific Co. Ltd. 4,877,834 2,194,321 33699192
Furama Hotel Enterprises Ltd. 245,000 412,313 36199E22
Grand Hotel Holdings Ltd. Class A 6,260,000 2,532,461 38599292
Guangzhou Investment Co. Ltd. 3,020,000 860,096 40099G22
Guoco Group Ltd. 540,000 2,499,125 40299692
HKR International Ltd. 3,999,076 3,727,439 43999192
HSBC Holdings PLC 1,040,000 11,511,126 42199192
Hang Lung Development Co. Ltd. (b) 260,000 447,655 41099310
Hang Lung Development Co. Ltd.
(warrants) (b) 1,280,000 397,683 41099392
Hang Seng Bank 286,800 1,912,076 40987820
Harbour Centre Development Ltd. 680,000 1,012,336 41150010
Harbour Ring International Holdings 2,000 404 41199B92
Henderson Investment Ltd. 3,940,000 2,932,800 42599422
Hong Kong & Shanghai Hotels 2,707,000 4,170,168 71899292
Hong Kong China Ltd. 572,000 281,384 44599B22
Hong Kong Electric Holdings Ord. 1,700,000 5,017,669 43858010
Hong Kong Land Holdings Ltd. 6,319,000 17,751,149 43858292
Hong Kong Telecommunications Ltd. 3,700,000 7,088,941 43857991
Hopewell Holdings Ltd. 3,900,000 3,483,636 44099999
Hutchison Whampoa Ltd. Ord. 6,339,000 26,054,507 44841510
Hysan Development Co. Ltd. 1,000,000 2,925,680 44916510
JCG Holdings 3,522,000 2,245,505 46799792
Jardine Matheson & Co. Ltd. Ord. 676,966 4,425,645 47111510
Ka Wah Bank Ltd. 3,622,500 2,204,066 48999G22
Kong Wah Holdings Ltd. (b) 1,170,000 252,942 50599B92
Li & Fung Ltd. 1,663,000 1,054,891 51899592
National Mutual Asia Ltd. (b) 1,000 508 63699592
New World Development Co. Ltd. 512,778 1,573,244 65171310
New World Development Co. Ltd.:
(warrants) (b) 1,781,000 2,236,420 64927420
(warrants) (b) 320,000 480,538 65171392
Orient Telecom. & Tech. Holdings Ltd. 4,598,000 2,336,290 69599F22
Paliburg Development Ltd. 4,000,000 600,671 69699C22
Pricerite Group Ltd. (b) 500,000 84,145 74199D22
Regal Hotels Holding 16,030,000 4,150,327 75999110
Ryoden Development Ltd. 1,580,000 521,574 78399B22
Ryoden Development Ltd.
(warrants) (b) 173,600 28,991 78399B23
SHARES VALUE (NOTE 1)
Shangri-La Asia Ltd. (b) 2,158,000 $ 2,961,251 84599M22
Sime Darby Hong Kong Ltd. 757,000 1,215,167 82899392
Starlite Holdings Ltd. (b) 500,000 108,740 85599892
Sun Hung Kai Properties Ltd. 3,469,000 20,882,170 86676H10
Swire Pacific Class A 2,530,000 18,177,405 87079410
Tak Wing Investment Ltd. Ord. 2,000,000 543,710 92399692
Team Concepts Holdings Ltd. 2,000,000 331,400 87999J22
Union Bank of Hong Kong 1,000,000 938,550 90499C92
Vitasoy International Holdings Ltd. 400,000 160,524 92899G22
Wharf Holdings (b) (c) 220,000 848,707 96299110
Wing Hang Bank Ltd. (b) 1,300,000 3,012,412 97499522
Wing Shan International 10,327,000 2,874,293 97499722
Winton Holdings Ltd. 450,000 133,987 97699122
235,093,060
INDONESIA - 2.6%
Andayani Megah PT 70,000 204,494 03399722
Argha Karya Prima PT (b) 618,950 1,004,537 01099992
Astra International (For. Reg.) 562,000 4,273,892 04699894
Bank Bali PT (For. Reg.) 100,000 238,809 06099C93
Bank Dagang Nas Indonesia PT 1,500,000 2,191,016 06099Q22
Bank International Indonesia Ord. (b) 360,000 1,043,341 06199B92
Ciputra Development PT (For. Reg.) 75,500 217,061 14999H22
Dharmala International Land 1,265,000 2,199,708 25399592
Gadjah Tunniggal Ord. 771,000 1,242,374 36599292
Indah Kiat Pulp & Paper (For. Reg.) 550,000 752,367 45499B23
Indocement Tungaal Prakarsa PT 60,000 528,626 68399093
Kalbe Farma 130,000 699,270 48699992
Multibreeder Adirama Indo PT 55,000 84,163 62599A22
Sampoerna, Hanjaya Mandala 268,500 2,054,339 82299892
Semen Gresik (For. Reg.) (b) 347,000 1,255,068 84399693
Sumalindo Lestari Jaya PT (For. Reg.) 12,000 47,715 86599G22
Tjiwa Kimia Pabrik Kertas 85,000 189,192 95499292
18,225,972
KOREA (SOUTH) - 11.6%
Anam Electronics Co. Ltd. 30,000 571,994 03399492
Asia Motors Co., Inc. 26,450 428,990 04499B22
Boram Bank (New) 24,457 245,266 09999325
Cheil Foods & Chemical Industries (b) 16,968 1,113,413 16399C22
Chosun Brewery Co. Ltd. (b) 165,880 4,189,613 22899822
Daewoo Corp. 75,784 1,360,490 23799B22
Daewoo Corp. (warrants) (b) 1,150 3,133,750 23799B25
Daewoo Electronics Co. Ltd. 128,450 1,828,865 23899C22
Daewoo Electronics Co. Ltd. (New) 8,689 119,410 23899C23
Daewoo Heavy Industries Ltd. (b) 458,504 6,414,627 23999492
Daewoo Metal Co. 100,568 1,867,673 24999B22
Daewoo Securities Co. Ltd. 42,230 1,610,355 25999322
Daewoo Telecommunication 8,400 140,399 27999192
Daeyoung Electronics Industry (New) (b) 1,629 34,488 30999122
Daihan Paint & Ink Manufacturing
Co. Ltd. 12,280 585,341 23399N22
Dong Ah Construction Industries Co. Ltd. 19,484 844,298 25799K22
Dong Ah Construction Industries Co.
Ltd. EDR 40,592 1,156,872 25799K23
Dong Ah Securities Co. 115,670 2,033,569 25799X22
Dong Ah Securities Co. (New) 20,160 339,453 25799X23
Dong Shin Construction Co. 50,000 680,945 25899B22
Dongbu Chemical Co. Ltd. 100,000 1,262,845 25899722
Dongbu Construction Co. 40,100 605,695 25799M22
Dongbu Securities Co. Ltd. 70,000 1,230,655 25899A22
Dongsuh Securities Co. 57,400 1,172,588 25799P22
Hanil Bank 235,000 2,548,718 41099C22
Hanil Development Co. 3,600 71,314 41099822
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
KOREA (SOUTH) - CONTINUED
Il Shin Spinning Co. Ltd. 3,159 $ 233,493 45199F22
Inchon Iron & Steel Co. (b) 139,920 6,288,342 45399J22
KIA Service Co. 13,540 248,102 48699C23
Keang Nam Enterprises 471 8,222 48699D22
Kolon International Corp. 5,000 111,427 73099422
Korea Asia Fund IDR 26 260,000 50099A93
Korea Container Terminal Co. 3,290 201,628 50099L22
Korea Electric Power Corp. 175,000 6,066,606 50099B92
Korea First Securities Co. 898 18,456 50099K22
Korea Fund, Inc. 87,600 1,861,500 50063410
Kyung Nam Woolen Textile Ind. Co. (b) 2,650 64,962 61699A22
Lotte Confectionery Co. 5,600 782,474 54499692
Lucky Securities Co. 12,120 279,103 54999C22
Midopa Company (New) 4,352 78,128 59899E23
Miwon Co. Ltd. 74,500 1,863,191 61299693
Pohang Iron & Steel Co. Ltd. 41,255 3,990,144 73045092
Samsung Co. Ltd. sponsored GDR 30,000 840,000 79605393
Samsung Construction Co. Ltd. 40,767 1,892,735 90499J22
Samsung Electronics Co. Ltd. 23,250 2,756,493 79611092
Samsung Electronics Co. Ltd. GDS (c) 72,000 4,608,000 79605020
Sang Up Securities Co. Ltd. 258,650 6,628,765 80099C22
Seoul Securities Co. (b) 33,520 589,308 83599P22
Shin Dong-Ah Fire & Marine (b) 12,280 519,965 82499L22
Shin Poong Paper Manufacturing Co. 25,500 1,673,269 94699C22
Shin Wha Engineering & Construction
Co. Ltd. 40,000 638,851 95399A22
Woo Sung Construction Co. 128,346 1,604,921 97899622
Yukong Ltd. (b) 52,000 2,639,593 98899K22
82,339,304
MALAYSIA - 18.3%
Advance Synergy BHD 1,200,000 3,024,871 00799B22
Aokam Perdana BHD (b) 330,000 3,204,122 01899792
Bandar Raya Development BHD 2,000 3,062 06000210
Berjaya Industrial BHD (b) 1,912,000 1,785,047 08299522
Berjaya Leisure BHD 563,000 634,946 08410592
Berjaya Leisure BHD (warrants) 1,644,525 6 08410594
Berjaya Singer BHD (b) 400,000 244,976 08499A96
Berjaya Sports Toto BHD (b) 776,000 1,390,993 08499E22
Cement Industry of Malaysia BHD 100,000 313,690 15199792
Cement Manufacturers Sarawak 109,000 537,307 15199C22
Consolidated Plantations BHD 1,197,000 1,636,052 20999510
Diversified Resources BHD (b) 1,210,000 3,547,127 25499F22
Dunlop Estates BHD 185,000 552,693 26599392
EON (Edaran Otomobil NAS) BHD (b) 281,000 1,710,472 29599292
Ekran BHD Ord. (b) 926,000 7,849,804 28299792
Faber Group BHD 1,000 1,374 30299892
Genting BHD 902,000 10,105,313 37245210
Hock Hua Bank BHD (b) 220,000 603,854 43499B22
IGB Corp. BHD (MLAY Reg.) 1,000 919 44960092
Kim Hin Industry BHD 40,000 233,027 49499C92
Land & General BHD 2,559,000 8,696,281 51499693
Leader Universal Holdings BHD 982,000 4,767,345 52199192
Magnum Corp. BHD 2,000,000 4,705,355 55999392
Malaysian Assurance Alliance BHD (b) 2,000,000 3,346,030 56099Q22
Malaysian Banking (b) 351,000 1,979,275 56090499
Malaysian Pacific Industries Ord. 150,000 239,749 56099492
Malaysian Resources Corp. BHD 686,400 1,396,996 56099793
Metacorp Berhad 190,000 915,304 59099E92
Mulpha International Ltd. 1,993,333 3,245,545 62499A22
Multi-Purpose Holding BHD (b) 1,902,000 3,238,897 00099292
Nam Fatt BHD (b) 118,800 354,919 63299492
Pacific Chemicals BHD (b) 929,000 6,487,523 69599H22
Press Metal BHD 100,000 227,799 74199B22
Public Bank (For. Reg.) (b) 759,000 1,522,979 84499696
SHARES VALUE (NOTE 1)
Public Bank BHD (For. Reg.) 200,000 $ 407,050 84499693
Renong BHD 3,197,000 4,345,761 75999H22
Resorts World BHD 1,745,000 9,774,815 76199592
Southern Bank BHD 50,000 126,036 84199992
Sungei Way Holdings (b) 179,000 782,098 86799892
Sungei Way Holdings (warrants) (b) 237,000 708,045 86799894
TH Loy Industry BHD (b) 220,000 928,374 87799A22
Taiping Consolidated BHD (b) 1,200,000 2,240,640 95599B22
Tanjong PLC (MLAY Reg.) 687,500 3,337,627 87599993
Technology Resources (b) 2,640,000 11,348,868 93699692
Tenega Nasional BHD 80,000 445,142 92099992
Time Engineering BHD (b) 400,000 1,262,232 93099592
Tongkah Holdings BHD 2,120,000 3,895,140 94999C92
Tongkah Holdings BHD:
(rights) (b) 746,666 362,484 94999C97
(rights) (b) 448,000 281,066 94999C95
United Engineers BHD 1,545,000 6,750,507 93099692
YTL Corporation (b) 510,000 2,342,593 98799092
YTL Corporation (warrants) (b) 100,000 246,471 98799094
Yangtzekiang BHD 226,800 1,693,928 98499G22
129,782,529
PHILIPPINES - 4.5%
Bacnotan Consolidated Industry, Inc. 206,660 1,876,338 08099423
First Philippines Holdings Corp. 961,620 3,527,280 33699492
House of Investments, Inc. (b) 1,031,000 3,781,770 44199C92
Meralco B (b) 280,790 5,404,711 58799A92
Metropolitan Bank & Trust Co. 80,000 2,208,098 59199D22
Philippine Long Distance Telephone Co. 196,800 12,792,000 71825210
Philippine National Bank (b) 55,000 998,729 71899392
Universal Robina Corp. 1,651,500 1,169,576 91399F22
31,758,502
SINGAPORE - 5.0%
Bonvests Holdings Ltd. (b) 3,618,000 2,699,137 09899022
City Development 340,000 1,716,510 17799010
City Development (warrants) (b) 5,400 16,670 17799025
DBS Land Ltd. 1,000,000 3,074,150 24399292
Datapulse Technology Ltd. 32,000 16,567 23799J22
HTP Holdings Ltd. 3,300,000 3,798,960 44299S22
IPCO International 770,000 3,888,500 46299D22
Intraco Ltd. 55,000 87,594 46099992
Jurong Engineering Ltd. 257,000 1,834,651 49499692
Liang Court Holdings Ltd. 3,567,000 3,463,998 52599A92
Natsteel Ltd. 400,000 1,363,432 63660099
Overseas Union Bank Ltd. (For. Reg.) 456,000 2,316,804 68990192
Parkway Holding (b) 700,000 1,431,605 70199192
Sal Industrial Leasing Ltd. 170,000 169,595 81499792
Singapore Aerospace (For. Reg.) (b) 234,000 451,475 83999793
Singapore Press Holdings Ltd. (For. Reg.) 180,000 2,951,959 82999910
Ssangyong Cement Ltd. 400,000 1,311,980 75299093
Straits Steamship Land Ord. 150,000 384,587 86299292
United Engineers Ltd. 1,250,000 2,556,437 96499192
Van Der Horst Ltd. 436,000 2,074,989 92099C22
35,609,600
THAILAND - 12.3%
Advanced Information Service:
(For. Reg.) 110,300 4,205,243 00799792
(Loc.Reg.) 4,000 147,636 00799793
Asia Securities Trading Co. (For. Reg.) 1,094,000 3,910,246 04599D23
Bangkok Bank 80,000 603,654 06099210
Bangkok Metropolitan Bank Public
(Loc.Reg.) 5,848,000 4,528,832 06199E23
Dhana Siam Finance & Securities Co.
(For. Reg.) 199,700 4,346,131 24299593
COMMON STOCKS - CONTINUED
SHARES VALUE (NOTE 1)
THAILAND - CONTINUED
Dhana Siam Finance & Securities Co.
(warrants) (b) 140,000 $ 1,690,230 24299598
Ekachart Finance & Security Co. Ltd. 67,600 429,547 28199J23
Finance One Public Co. (For. Reg.) 371,350 4,428,517 31799E93
First Asia Securities (For. Reg.) 254,800 2,226,211 31899F97
First Pacific Land (warrants) (b) 1,000,000 972,990 70699194
General Finance & Securities Public Co. Ltd.:
(For. Reg.) 484,800 4,351,264 36999693
(Loc. Reg.) (b) 50,000 448,769 36999692
Jalaprathan Cement Ltd. (For. Reg.) 47,400 1,995,393 47099493
Kiatnakin Finance & Securities (For. Reg.) 30,000 467,037 49699794
Loxley Public Co. Ltd. (For. Reg.) 104,100 2,058,848 54899523
NTS Steel Group Co. Ltd. (For. Reg.) 313,000 870,134 64999893
Nakornthon Bank Ltd. (warrants ) (b) 10,000 3,574 63099C27
Nation Publishing Group (For. Reg.) 18,000 55,759 63799323
National Finance & Securities Co.
(For. Reg.) 106,500 1,370,374 63199593
One Holding Ltd. (For. Reg.) 3,086,800 8,458,665 68299B23
Property Perfect Co. Ltd. (For. Reg.) (b) 300,600 3,605,291 74399F23
Ramkamhaeng Hospital Co. (For. Reg.) 50,000 162,827 75199493
Securities One Ltd.:
(For. Reg.) 235,000 5,861,001 81399693
(Loc. Reg.) 15,000 374,106 81399692
Shinawatra Computer &
Communication Co. (For. Reg.) (b) 130,000 2,994,439 94799193
Siam Cement (For. Reg.) 154,000 6,703,098 78799010
Siam City Cement:
(For. Reg.) 167,000 2,732,486 82570799
(Loc. Reg.) 132,000 2,138,841 82570798
Siam General Factoring Co. Ltd.
(For. Reg) 36,300 111,005 82899C23
Siam Syntech Construction Public Co.
Ltd. (For. Reg.) 197,000 1,251,787 83499H23
Supalai Co. Ltd. (For. Reg.) 80,000 559,174 97199923
TPI Polene Public Co. Ltd. (For. Reg.) 599,200 3,688,483 94799093
Thai Financial Syndicate Ltd. 619,600 3,248,104 92399B93
Thai Military Bank (For. Reg.) 725,000 2,044,282 90199989
Univest Land Public Co. 210,000 825,655 91599F22
Wattachak Co. Ltd. (For. Reg.) 210,200 3,155,503 94299H23
87,025,136
UNITED KINGDOM - 0.4%
Korea Europe Fund IDR 780 3,120,000 50799893
TOTAL COMMON STOCKS
(Cost $663,321,441) 624,805,486
NONCONVERTIBLE PREFERRED STOCKS - 0.7%
KOREA (SOUTH) - 0.7%
Baikyang Co. (b) 4,290 454,123 05699D23
Cheil Foods & Chemical Industries 13,500 722,050 16399C23
Dongbu Construction Co. (b) 60,360 777,199 25799M23
Dongsuh Securities Co. Ltd. 80,000 1,485,700 25799P23
Hanshin Securities Co. Ltd. 500 9,719 41899724
Lucky Securities Co. 30,498 623,024 54999C24
Sunkyong Securities Co. 52,000 933,514 96199D23
TOTAL NONCONVERTIBLE PREFERRED STOCKS
(Cost $5,580,080) 5,005,329
CORPORATE BONDS - 3.9%
PRINCIPAL VALUE (NOTE 1)
AMOUNT (A)
CONVERTIBLE BONDS - 3.7%
KOREA (SOUTH) - 2.9%
Cheil Foods & Chemical Industries
euro 3%, 12/31/06 - KRW 800,000 $ 1,680,000 16399CAA
Daewoo Corp. euro 1/4%,
12/31/08 - 3,960,000 5,266,800 23799BAB
Daewoo Corp. 3 1/4%,
12/31/97 (c) - CHF 1,500,000 1,368,350 23799BAC
Daewoo Electronics euro
2 1/4%, 12/31/08 - 2,100,000 2,373,000 23899CAA
Jinro Ltd. euro 1/4%,
9/30/09 - 1,000,000 972,500 732994AA
Samsung Electro-Mechanics Co.
1/4%, 12/31/00 (c) - CHF 500,000 302,890 95099DAA
Shinwon Corp. euro 1/2%,
12/31/08 - 350,000 395,500 98499DAA
Sunkyong Ltd. euro 4 3/4%,
5/16/96 - CHF 750,000 593,308 96199CAA
Ssangyong Oil Refining euro
3 3/4%, 12/08/08 - 6,250,000 7,312,500 78099AAA
20,264,848
MALAYSIA - 0.4%
Berjaya Sport Culs 9%,
10/30/97 - MYR 1,225,000 1,784,114 08499EAB
Land & General BHD 4 1/2%,
12/31/94 - MYR 970,000 1,376,503 514996AA
3,160,617
PHILIPPINES - 0.0%
Benpress Holdings Corp. euro
4 1/5%, 12/31/94 (c) - 60,000 192,210 082300AA
THAILAND - 0.4%
Siam Syntech Construction Co.
4 1/2%, 2/25/02 (c) - 1,500,000 1,177,500 825719AA
Wattachak Co. Ltd. euro 3 1/2%,
12/6/03 - 1,300,000 1,417,000 94299HAA
2,594,500
TOTAL CONVERTIBLE BONDS 26,212,175
NONCONVERTIBLE BONDS - 0.2%
MALAYSIA - 0.2%
Berjaya Leisure BHD 5%,
1/18/99 - 1,644,525 552,720 0841059A
United Engineers BHD
4%, 3/9/98 - MYR 1,653,500 555,736 9102139E
1,108,456
THAILAND - 0.0%
Finance One Public Co.
3 3/4%, 2/7/01 - THB 5,635 223,789 31799EAA
TOTAL NONCONVERTIBLE BONDS 1,332,245
TOTAL CORPORATE BONDS
(Cost $29,879,438) 27,544,420
REPURCHASE AGREEMENTS - 7.4%
MATURITY
AMOUNT
Investments in repurchase agreements
(U.S. Treasury obligations), in a joint
trading account at 3.56% dated
4/29/94 due 5/2/94 $ 52,764,649 $ 52,749,000
TOTAL INVESTMENT IN SECURITIES - 100%
(Cost $751,529,959) $ 710,104,235
CURRENCY ABBREVIATIONS
KRW - Korean won
MYR - Malaysian ringgit
CHF - Swiss franc
THB - Thai baht
LEGEND
1. Principal amount is stated in United States dollars unless otherwise
noted.
2. Non-income producing
3. Security exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At the period
end, the value of these securities amounted to $8,497,657 or 1.2% of net
assets.
4. Standard & Poor's Corporation credit ratings are used in the absence
of a rating by Moody's Investors Service, Inc.
OTHER INFORMATION
Purchases and sales of securities, other than short-term securities,
aggregated $1,074,833,777 and $814,572,336, respectively.
The fund participated in the interfund lending program as a lender. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding amounted to $20,019,000 and $28,538,000,
respectively. The weighted average interest rate was 3.92%. Interest earned
from the interfund lending program amounted to $26,162 and is included in
interest income on the Statement of Operations (see Note 2 of Notes to
Financial Statements).
The fund participated in the bank borrowing program. The maximum loan and
the average daily loan balances during the period for which loans were
outstanding amounted to $5,361,000and $5,861,000, respectively. The
weighted average interest rate was 3.70%. Interest expense includes $1,103
paid under the bank borrowing program (see Note 5 of Notes to Financial
Statements).
INCOME TAX INFORMATION
At April 30, 1994, the aggregate cost of investment securities for income
tax purposes was $751,529,959. Net unrealized depreciation aggregated
$41,425,724, of which $53,572,684 related to appreciated investment
securities and $94,998,410 related to depreciated investment securities.
At October 31, 1993, the fund had a capital loss carryforward of
approximately $282,000 which will expire on October 31, 2001.
INDUSTRY DIVERSIFICATION
As a Percentage of Total Value of Investments
Basic Industries 8.1%
Construction & Real Estate 24.5
Durables 2.6
Energy 1.4
Finance 22.7
Health 0.1
Industrial Machinery & Equipment 6.6
Media & Leisure 8.3
Nondurables 2.3
Repurchase Agreements 7.4
Retail & Wholesale 2.3
Services 0.2
Technology 2.2
Transportation 4.3
Utilities 7.0
100.0%
SOUTHEAST ASIA
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
<TABLE>
<CAPTION>
<S> <C> <C>
APRIL 30, 1994 (UNAUDITED)
ASSETS
Investment in securities, at value (including repurchase agreements of $52,749,000) (cost $751,529,959) $ 710,104,235
(Notes 1 and 2) - See accompanying schedule
Receivable for investments sold 13,996,298
Receivable for fund shares sold 3,065,090
Dividends receivable 2,141,855
Interest receivable 200,467
Redemption fees receivable (Note 1) 6,743
Other receivables 362,994
TOTAL ASSETS 729,877,682
LIABILITIES
Payable to custodian bank $ 228,346
Payable for investments purchased 30,183,787
Payable for fund shares redeemed 3,750,752
Accrued management fee 365,850
Other payables and accrued expenses 1,093,028
TOTAL LIABILITIES 35,621,763
NET ASSETS $ 694,255,919
Net Assets consist of (Note 1):
Paid in capital $ 701,226,990
Distributions in excess of net investment income (3,357,242
)
Accumulated undistributed net realized gain (loss) on investments 37,811,895
Net unrealized appreciation (depreciation) on investment securities (41,425,724
)
NET ASSETS, for 53,986,590 shares outstanding $ 694,255,919
NET ASSET VALUE, offering price and redemption price per share ($694,255,919 (divided by) 53,986,590 shares)(Note 4)$12.86
Maximum offering price price per share (100/97 of $12.86) $13.26
</TABLE>
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
<S> <C> <C>
SIX MONTHS ENDED APRIL 30, 1994 (UNAUDITED)
INVESTMENT INCOME $ 6,460,376
Dividends
Interest 999,306
7,459,682
Less foreign taxes withheld (Note 1) (542,852
)
TOTAL INCOME 6,916,830
EXPENSES
Management fee (Note 4) $ 3,303,865
Basic fee
Performance adjustment (83,243
)
Transfer agent: 2,178,495
Fees (Note 4)
Redemption fees (Note 1) (223,466
)
Accounting fees and expenses 204,903
(Note 4)
Non-interested trustees' compensation 2,347
Custodian fees and expenses 943,448
Registration fees 181,411
Audit 32,446
Legal 4,020
Interest (Note 5) 1,103
Miscellaneous 2,366
TOTAL EXPENSES 6,547,695
NET INVESTMENT INCOME 369,135
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (NOTE 1) 38,100,762
Net realized gain (loss) on investment securities
Change in net unrealized appreciation (depreciation) on investment securities (115,508,211
)
NET GAIN (LOSS) (77,407,449
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS $ (77,038,314
)
OTHER INFORMATION
Accounting fees paid to FSC $204,903
(Note 4)
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS SIX MONTHS APRIL 19, 1993
ENDED APRIL 30, (COMMENCEMEN
1994 T
(UNAUDITED) OF OPERATIONS)
TO
OCTOBER 31,
1993
Operations $ 369,135 $ 338,637
Net investment income
Net realized gain (loss) on investments 38,100,762 (386,089
)
Change in net unrealized appreciation (depreciation) on investments (115,508,211 74,082,487
)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS (77,038,314 74,035,035
)
Distributions to shareholders (2,301,564 -
From net investment income )
In excess of net investment income (1,666,228 -
)
TOTAL DISTRIBUTIONS (3,967,792 -
)
Share transactions 1,131,284,226 464,080,850
Net proceeds from sales of shares
Reinvestment of distributions 3,847,337 -
Cost of shares redeemed (866,494,889 (38,754,143
) )
Redemption fees (Note 1) 6,955,915 307,694
Net increase (decrease) in net assets resulting from share transactions 275,592,589 425,634,401
TOTAL INCREASE (DECREASE) IN NET ASSETS 194,586,483 499,669,436
NET ASSETS
Beginning of period 499,669,436 -
End of period (including under (over) distribution of net investment
income of $(3,260,020) and $338,637, $ 694,255,919 $ 499,669,436
respectively)
OTHER INFORMATION
Shares
Sold 76,748,246 41,377,754
Issued in reinvestment of distributions 259,955 -
Redeemed (60,766,297 (3,633,068
) )
Net increase (decrease) 16,241,904 37,744,686
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENTS.
</TABLE>
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
<S> <C> <C>
SELECTED PER-SHARE DATA SIX MONTHS APRIL 19, 1993
ENDED APRIL 30, (COMMENCEMENT
1994 OF OPERATIONS) TO
(UNAUDITED) OCTOBER 31, 1993
Net asset value, beginning of period $ 13.24 $ 10.00
Income from Investment Operations
Net investment income - .01
Net realized and unrealized gain (loss) on investments (.34) 3.22
Total from investment operations (.34) 3.23
Less Distributions
From net investment income (.04) -
In excess of net investment income (.03) -
Total distributions (.07) -
Redemption fees added to paid in capital (Note 1) .03 .01
Net asset value, end of period $ 12.86 $ 13.24
TOTAL RETURN(dagger)(diamond) (2.41)% 32.40%
RATIOS AND SUPPLEMENTAL DATA
Net assets, end of period (000 omitted) $ 694,256 $ 499,669
Ratio of expenses to average net assets 1.55%* 2.00%*
Ratio of expenses to average net assets before expense reductions 1.55%* 2.06%*
Ratio of net investment income to average net assets .09%* .45%*
Portfolio turnover rate 212%* 14%*
* ANNUALIZED
(dagger) TOTAL RETURNS FOR PERIODS OF LESS THAN ONE YEAR ARE NOT ANNUALIZED AND DO NOT INCLUDE THE ONE TIME SALES CHARGE.
(diamond)THE TOTAL RETURNS WOULD HAVE BEEN LOWER HAD CERTAIN EXPENSES NOT BEEN REDUCED DURING THE PERIODS SHOWN.
</TABLE>
NOTES TO FINANCIAL STATEMENTS
For the period ended April 30, 1994 (Unaudited)
a SIGNIFICANT ACCOUNTING POLICIES.
Fidelity Canada Fund, Fidelity Diversified International Fund, Fidelity
Emerging Markets Fund, Fidelity Europe Fund, Fidelity Europe Capital
Appreciation Fund, Fidelity International Growth & Income Fund,
Fidelity Japan Fund, Fidelity Latin America Fund, Fidelity Overseas Fund,
Fidelity Pacific Basin Fund, Fidelity Southeast Asia Fund and Fidelity
Worldwide Fund (the funds) are funds of Fidelity Investment Trust (the
trust). The trust is registered under the Investment Company Act of 1940,
as amended (the 1940 Act), as an open-end management investment company
organized as a Massachusetts business trust. Each fund is authorized to
issue an unlimited number of shares. The following summarizes the
significant accounting policies of the funds:
SECURITY VALUATION. Securities for which quotations are readily available
are valued at the last sale price, or if no sale price, at the closing bid
price in the principal market in which such securities are normally traded.
Securities including restricted securities for which quotations are not
readily available are valued primarily using dealer-supplied valuations or
at their fair value as determined in good faith under consistently applied
procedures under the general supervision of the Board of Trustees.
Short-term securities maturing within sixty days are valued at amortized
cost or original cost plus accrued interest, both of which approximate
current value.
FOREIGN CURRENCY TRANSLATION. The accounting records of each fund are
maintained in U.S. dollars. Investment securities and other assets and
liabilities denominated in a foreign currency are translated into U.S.
dollars at the current exchange rate. Purchases and sales of securities,
income receipts and expense payments are translated into U.S. dollars at
the exchange rate on the dates of the transactions.
It is not practicable to identify the portion of each amount shown in the
fund's Statement of Operations under the caption "Realized and Unrealized
Gain (Loss) on Investments" that arises from changes in foreign currency
exchange rates. Investment income includes net realized and unrealized
currency gains and losses recognized between accrual and payment dates.
INCOME TAXES. As a qualified regulated investment company under Subchapter
M of the Internal Revenue Code, each fund is not subject to U.S. federal
income taxes to the extent that it distributes all of its taxable income
for its fiscal year. Each fund may be subject to foreign taxes on income,
gains on investments or currency repatriation, and accrues such taxes as
applicable. The schedules of investments include information regarding
income taxes under the caption "Income Tax Information."
INVESTMENT INCOME. Dividend income is recorded on the ex-dividend date,
except certain dividends from foreign securities where the ex-dividend date
may have passed, are recorded as soon as the funds are informed of the
ex-dividend date. Interest income, which includes accretion of original
issue discount, is accrued as earned. Investment income is recorded net of
foreign taxes withheld where recovery of such taxes is uncertain.
EXPENSES. Most expenses of the trust can be directly attributed to a fund.
Expenses which cannot be directly attributed are apportioned between the
funds in the trust.
PREPAID EXPENSES. FMR bears all organizational expenses except for
registering and qualifying a fund and shares of a fund for distribution
under federal and state securities law. These expenses were borne by Europe
Capital Appreciation and are being amortized over one year.
DISTRIBUTIONS TO SHAREHOLDERS. Distributions are recorded on the
ex-dividend date. Certain foreign currency gains (losses) are taxable as
ordinary income and, therefore, increase (decrease) taxable ordinary income
available for distribution.
Income and capital gain distributions are determined in accordance with
income tax regulations which may differ from generally accepted accounting
principles. These differences are primarily due to differing treatments for
futures transactions, foreign currency transactions, passive foreign
investment companies (PFIC), and losses deferred due to wash sales. The
funds also utilized earnings and profits distributed to shareholders on
redemption of shares as a part of the dividends paid deduction for income
tax purposes.
Permanent book and tax basis differences relating to shareholder
distributions will result in reclassifications to paid in capital.
Undistributed net investment income may include temporary book and tax
basis differences which will reverse in a subsequent period. Any taxable
income or gain remaining at fiscal year end is distributed in the following
year.
REDEMPTION FEES. Shares held in Emerging Markets, Latin America and
Southeast Asia less than 90 days are subject to a redemption fee equal to
1.50% of the proceeds of the redeemed shares. A portion of the fee is
accounted for as a reduction of transfer agent expenses. This portion of
the redemption fee is used to offset the transaction costs and other
expenses that short-term trading imposes on those funds and their
shareholders. The remainder of the redemption fee is accounted for as an
addition to paid in capital. In March 1994, the Board of Trustees of Japan
approved a 1% redemption fee on shares held less than 90 days which is
effective for shares purchased after June 6, 1994.
SECURITY TRANSACTIONS. Security transactions are accounted for as of trade
date. Gains and losses on securities sold are determined on the basis of
identified cost.
Information regarding purchases and sales of securities (other than
short-term securities), the market value of future contracts opened and
closed, and written options is included under the caption "Other
Information" at the end of each applicable fund's schedule of investments.
1. SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
CHANGE IN ACCOUNTING FOR DISTRIBUTIONS TO SHAREHOLDERS Effective November
1, 1993, the funds adopted Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain,
and Return of Capital Distributions by Investment Companies. As a result,
the funds changed the classification of distributions to shareholders to
better disclose the differences between financial statement amounts and
distributions determined in accordance with income tax regulations.
Accordingly, amounts as of October 31, 1993 have been reclassified as
follows:
INCREASE (DECREASE) (INCREASE) DECREASE INCREASE (DECREASE) (INCREASE)
DECREASE
INCREASE (DECREASE) IN UNDISTRIBUTED IN ACCUMULATED IN ACCUMULATED IN
ACCUMULATED
FUND IN PAID IN CAPITAL NET INVESTMENT INCOME NET INVESTMENT LOSS NET
REALIZED GAIN NET REALIZED LOSS
Canada $ 992,455 $ - $ 237,762 $ (1,230,217) $ -
Diversified
International 2,234 (1,181,221) 1,178,987 -
Emerging Markets 50,022 (120,832) - 70,810
Europe 17,123,165 (8,962,504) - (8,160,661)
International Growth &
Income 941,401 (3,608,501) 2,667,100 -
Japan 166 - (364,505) 364,339 -
Latin America - 26,874 (26,874) -
Overseas 391,398,948 (4,020,684) (387,378,264) -
Pacific Basin 40,875,663 - 2,434,566 (43,310,229) -
Southeast Asia - (97,222) - 97,222
Worldwide (47,579) (689,914) 737,493 -
No adjustments were necessary for the Europe Capital Appreciation Fund.
b OPERATING POLICIES.
FORWARD FOREIGN CURRENCY CONTRACTS. The funds may enter into forward
foreign currency contracts. These contracts involve market risk in excess
of the amount reflected in the funds' Statement of Assets and Liabilities.
The face or contract amount in U.S. dollars reflects the total exposure the
funds have in that particular currency contract. The U.S. dollar value of
forward foreign currency contracts is determined using forward currency
exchange rates supplied by a quotation service. Losses may arise due to
changes in the value of the foreign currency or if the counterparty does
not perform under the contract.
Purchases and sales of forward foreign currency contracts having the same
settlement date and broker are offset and presented net on the Statement of
Assets and Liabilities. Gain (loss) on the purchase or sale of forward
foreign currency contracts having the same settlement date and broker is
recognized on the date of offset, otherwise gain (loss) is recognized on
settlement date.
REPURCHASE AGREEMENTS. The funds, through their custodian, receive delivery
of the underlying securities, whose market value is required to be at least
102% of the resale price at the time of purchase. The funds' investment
adviser, Fidelity Management & Research Company (FMR), is responsible
for determining that the value of these underlying securities remains at
least equal to the resale price.
JOINT TRADING ACCOUNT. Pursuant to an Exemptive Order issued by the
Securities and Exchange Commission (the SEC), the funds, along with other
registered investment companies having management contracts with FMR, may
transfer uninvested cash balances into a joint trading account. These
balances are invested in one or more repurchase agreements that are
collateralized by U.S. Treasury or Federal Agency obligations.
INTERFUND LENDING PROGRAM. Pursuant to an Exemptive Order issued by the
SEC, the funds, along with other registered investment companies having
management contracts with FMR, may participate in an interfund lending
program. This program provides an alternative credit facility allowing the
funds to borrow from, or lend money to, other participating funds. The
schedules of investments include information regarding interfund lending
for the applicable funds under the caption "Other Information."
FUTURES CONTRACTS AND OPTIONS. The funds may invest in futures contracts
and write options. These investments involve to varying degrees, elements
of market risk and risks in excess of the amount recognized in the
Statements of Assets and Liabilities. The face or contract amounts reflect
the extent of the involvement each fund has in the particular classes of
instruments. Risks may be caused by an imperfect correlation between
movements in the price of the instruments and the price of the underlying
securities and interest rates. Risks also may arise if there is an illiquid
secondary market for the instruments, or due to the inability of
counterparties to perform.
2. OPERATING POLICIES - CONTINUED
FUTURES CONTRACTS AND OPTIONS - CONTINUED
Futures contracts are valued at the settlement price established each day
by the board of trade or exchange on which they are traded. Options traded
on an exchange are valued using the last sale price or, in the absence of a
sale, the last offering price. Options traded over-the-counter are valued
using dealer-supplied valuations.
INDEXED SECURITIES. The funds may invest in indexed securities whose value
is linked either directly or inversely to changes in foreign currencies,
interest rates, commodities, indices, or other reference instruments.
Indexed securities may be more volatile than the reference instrument
itself, but any loss is limited to the amount of the original investment.
RESTRICTED SECURITIES. The funds are permitted to invest in privately
placed restricted securities. These securities may be resold in
transactions exempt from registration or to the public if the securities
are registered. Disposal of these securities may involve time-consuming
negotiations and expense, and prompt sale at an acceptable price may be
difficult. At the end of the period, restricted securities (excluding 144A
issues) are shown under the caption "Other Information" at the end of each
applicable fund's schedule of investments.
c JOINT TRADING ACCOUNT.
At the end of the period, Japan had 20% or more of its total investments in
repurchase agreements through a joint trading account. These repurchase
agreements were with entities whose creditworthiness has been reviewed and
found satisfactory by FMR. The repurchase agreements were dated April 29,
1994 and due May 2, 1994. The maturity value of the joint trading account
investments was $77,526,000 at 3.56%. The investments in repurchase
agreements through the joint trading account are summarized as follows:
SUMMARY OF JOINT TRADING ACCOUNT
Number of dealers or banks 24
Maximum amount with one dealer or bank 9.62%
Aggregate principal amount of agreements $12,996,926,000
Aggregate maturity amount of agreements $13,000,786,035
Aggregate market value of collateral $13,287,734,037
Coupon rates of collateral 3 1/4% to 15 3/4%
April 1994 to
Maturity dates of collateral February 2023
d FEES AND OTHER TRANSACTIONS WITH AFFILIATES.
MANAGEMENT FEE. As each fund's investment adviser, FMR receives a monthly
basic fee that is calculated on the basis of a group fee rate plus a fixed
individual fund fee rate applied to the average net assets of each fund.
The group fee rate is the weighted average of a series of rates ranging
from .30% to .52% and is based on the monthly average net assets of all the
mutual funds advised by FMR. The annual individual fund fee rate is .45%
for each fund in the trust.
The basic fee for Canada, Diversified International, Europe, Japan,
Overseas, Pacific Basin, and Southeast Asia is subject to a performance
adjustment (up to a maximum of + or - .20%) based on each fund's investment
performance as compared to the appropriate index over a specified period of
time.
For the period, each fund's management fee was equivalent to the following
annualized rates expressed as a percentage of average net assets:
Canada .83%
Diversified International .75%
Emerging Markets and International
Growth & Income .78%
Europe .68%
Europe Capital Appreciation .80%
Japan and Southeast Asia .76%
Latin America and Worldwide .79%
Overseas .81%
Pacific Basin .86%
The Board of Trustees approved a new group fee rate schedule with rates
ranging from .2850% to .5200%. Effective November 1, 1993, FMR has
voluntarily agreed to implement this new group fee rate schedule as it
results in the same or a lower management fee.
SUB-ADVISER FEE. FMR, on behalf of the funds, entered into sub-advisory
agreements with affiliates of FMR. In addition, one of the sub-advisers,
Fidelity International Investment Advisors (FIIA), entered into a
sub-advisory agreement with its subsidiary, Fidelity International
Investment Advisors (U.K.) Limited (FIIAL U.K.). Under the sub-advisory
arrangements, FMR may receive investment advice and research services and
may grant the sub-advisers investment management authority to buy and sell
securities. FMR pays its sub-advisers either a portion of its management
fee or a fee based on costs incurred for these services. FIIA pays FIIAL
U.K. a fee based on costs incurred for either service.
4. FEES AND OTHER TRANSACTIONS WITH AFFILIATES - CONTINUED
SALES LOAD. Fidelity Distributors Corporation (FDC), an affiliate of FMR,
is the general distributor of the funds. FDC is paid a 2% sales charge on
sales of shares of International Growth & Income and a 3% sales charge
on sales of shares of each of the other funds. The sales charge for
Emerging Markets, Latin America and Southeast Asia has been waived through
May 31, 1994. The sales charge for Canada, Diversified International,
Europe Capital Appreciation, Japan and Worldwide has been waived through
June 30, 1995.
Additionally, effective May 31, 1994, the sales charge for Overseas and
Pacific Basin will be waived through June 30, 1995, and International
Growth & Income, whose sales charge had been waived, will become a
no-load fund.
Prior to October 12, 1990, FDC was paid a 2% sales charge and a 1% deferred
sales charge from sales of shares of Canada, Europe and Pacific Basin, and
a 1% sales charge and 1% deferred sales charge from International Growth
& Income. Shares purchased before October 12, 1990 are subject to the
deferred sales charge upon redemption.
The amount received by FDC for sales charges and deferred sales charges are
shown under the caption "Other Information" on each applicable fund's
Statement of Operations.
TRANSFER AGENT FEE. Fidelity Service Co. (FSC), an affiliate of FMR, is the
funds' transfer, dividend disbursing and shareholder servicing agent. FSC
receives fees based on the type, size, number of accounts and the number of
transactions made by shareholders. FSC pays for typesetting, printing and
mailing of all shareholder reports, except proxy statements.
ACCOUNTING FEE. FSC maintains the funds' accounting records. The fee is
based on the level of average net assets for the month plus out-of-pocket
expenses. The accounting and pricing fees paid to FSC are shown under the
caption "Other Information" on each fund's Statement of Operations.
BROKERAGE COMMISSIONS. Certain funds placed a portion of their portfolio
transactions with brokerage firms which are affiliates of FMR. The
commissions paid to these affiliated firms are shown under the caption
"Other Information" at the end of each applicable fund's schedule of
investments.
e BANK BORROWINGS.
Each fund is permitted to have bank borrowings for temporary or emergency
purposes to fund shareholder redemptions. Each fund has established
borrowing arrangements with certain banks. Under the most restrictive
arrangement, each fund must pledge to the bank securities having a market
value in excess of 220% of the total bank borrowings. The interest rate on
the borrowings is the bank's base rate, as revised from time to time. The
maximum loan and the average daily loan balances during the periods for
which loans were outstanding are shown under the caption "Other
Information" at the end of each applicable fund's schedule of investments.
f EXPENSE REDUCTIONS.
For the period ended April 30, 1994, FMR directed certain portfolio trades
to brokers who paid a portion of certain funds' expenses. For the period,
the expenses of Emerging Markets, Europe, Latin America, and Worldwide were
reduced by $92, $3,406, $4,438, and $2,558, respectively, under this
arrangement.
g CONCENTRATION OF RISK.
The relatively large investments of Emerging Markets, Latin America and
Southeast Asia in countries with limited or developing capital markets may
involve greater risks than investments in more developed markets and the
prices of such investments may be volatile. The consequences of political,
social or economic changes in these markets may have disruptive effects on
the market prices of these funds' investments and the income they generate.
TO CALL FIDELITY
FOR PORTFOLIO INFORMATION AND QUOTES
The Fidelity Telephone Connection offers you special automated telephone
services for quotes and balances. The services are easy to use,
confidential and quick. All you need is a Touch Tone telephone.
YOUR PERSONAL IDENTIFICATION NUMBER
(PIN)
The first time you call one of our automated telephone services, we'll ask
you to set up your Personal Identification Number (PIN). The PIN assures
that only you have automated telephone access to your account information.
Please have your Customer Number (T-account #) handy when you call --
you'll need it to establish your PIN. If you would ever like to change your
PIN, just choose the "Change your Personal Identification Number" option
when you call. If you forget your PIN, please call a Fidelity
representative at 1-800-544-6666 for assistance.
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND QUOTES*
1-800-544-8544
Just make a selection from this record-ed menu:
PRESS
For quotes on funds you own.
1
For an individual fund quote.
2
For the ten most frequently
requested Fidelity fund quotes.
3
For quotes on Fidelity Select
Portfolios(registered trademark).
4
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Identification Number (PIN).
5
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representative.
6
(PHONE_GRAPHIC)(PHONE_GRAPHIC)MUTUAL FUND ACCOUNT
BALANCES 1-800-544-7544
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1
For your most recent fund activity
(purchases, redemptions, and
dividends).
2
To change your Personal
Identification Number (PIN).
3
To speak with a Fidelity
representative.
4
* WHEN YOU CALL THE QUOTES LINE, PLEASE REMEMBER THAT A FUND'S YIELD AND
RETURN WILL VARY AND, EXCEPT FOR MONEY MARKET FUNDS, SHARE PRICE WILL
ALSO VARY. THIS MEANS THAT YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR
SHARES. THERE IS NO ASSURANCE THAT MONEY MARKET FUNDS WILL BE ABLE
TO MAINTAIN A STABLE $1 SHARE PRICE; AN INVESTMENT IN A MONEY MARKET FUND
IS NOT INSURED OR GUARANTEED BY THE U.S. GOVERNMENT. TOTAL RETURNS
ARE HISTORICAL AND INCLUDE CHANGES IN SHARE PRICE, REINVESTMENT OF
DIVIDENDS AND CAPITAL GAINS, AND THE EFFECTS OF ANY SALES CHARGES. FOR MORE
INFORMATION ON ANY FIDELITY FUND INCLUDING MANAGEMENT FEES AND CHARGES,
CALL 1-800-544-8888 FOR A FREE PROSPECTUS. READ IT CAREFULLY BEFORE
YOU INVEST OR SEND MONEY.
TO WRITE FIDELITY
Please locate the address that is closest to you. We'll give your
correspondence immediate attention and send you written confirmation upon
completion of your request. Please send ALL correspondence about retirement
accounts to Dallas.
(LETTER_GRAPHIC)MAKING CHANGES
TO YOUR ACCOUNT
(such as changing name, address, bank, etc.)
Fidelity Investments
P.O. Box 2269
Boston, MA 02107-2269
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30280
Salt Lake City, UT 84130-0280
(LETTER_GRAPHIC)FOR NON-RETIRMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
Additional Payments
P.O. Box 2656
Boston, MA 02293-0656
Fidelity Investments
Additional Payments
P.O. Box 620024
Dallas, TX 75262-0024
Fidelity Investments
Additional Payments
P.O. Box 31455
Salt Lake City, UT 84131-0455
OVERNIGHT EXPRESS
Fidelity Investments
Additional Payments
World Trade Center
164 Northern Avenue
Boston, MA 02210
SELLING SHARES
Fidelity Investments
P.O. Box 193
Boston, MA 02103-0878
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
Fidelity Investments
P.O. Box 30281
Salt Lake City, UT 84130-0281
OVERNIGHT EXPRESS
Fidelity Investments
Attn: Redemptions
World Trade Center
164 Northern Avenue
Boston, MA 02210
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 193
Boston, MA 02101-0193
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
(LETTER_GRAPHIC)FOR RETIREMENT
ACCOUNTS
BUYING SHARES
Fidelity Investments
P.O. Box 620024
Dallas, TX 75262-0024
SELLING SHARES
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
GENERAL CORRESPONDENCE
Fidelity Investments
P.O. Box 660602
Dallas, TX 75266-0602
INVESTMENT ADVISER
Fidelity Management & Research Company
Boston, MA
INVESTMENT SUB-ADVISERS
Fidelity Management & Research (U.K.) Inc.
(FMR U.K.) London, England
Fidelity Management & Research (Far East) Inc.
(FMR Far East) Tokyo, Japan
Fidelity Investments Japan Ltd. (FIJ)
Fidelity International Investment Advisors (FIIA)
Fidelity International Investment Advisors
(U.K.) Limited (FIIAL U.K.)
OFFICERS
Edward C. Johnson 3d, PRESIDENT
J. Gary Burkhead, SENIOR VICE PRESIDENT
Penelope Dobkin, VICE PRESIDENT
George C. Domolky, VICE PRESIDENT
Simon Fraser, VICE PRESIDENT
John R. Hickling, VICE PRESIDENT
Patricia Satterthwaite, VICE PRESIDENT
Sally Walden, VICE PRESIDENT
Gary L. French, TREASURER
John H. Costello, ASSISTANT TREASURER
Arthur S. Loring, SECRETARY
Robert H. Morrison, MANAGER, SECURITY TRANSACTIONS
BOARD OF TRUSTEES
J. Gary Burkhead
Ralph F. Cox*
Phyllis Burke Davis*
Richard J. Flynn*
Edward C. Johnson 3d
E. Bradley Jones*
Donald J. Kirk*
Peter S. Lynch
Edward H. Malone*
Marvin L. Mann*
Gerald C. McDonough*
Thomas R. Williams*
GENERAL DISTRIBUTOR
Fidelity Distributors Corporation
Boston, MA
TRANSFER AND SHAREHOLDER
SERVICING AGENT
Fidelity Service Co.
Boston, MA
CUSTODIANS
Chase Manhattan Bank, N.A.
New York, NY
DIVERSIFIED INTERNATIONAL FUND, INTERNATIONAL GROWTH & INCOME FUND,
OVERSEAS FUND, WORLDWIDE FUND, EUROPE FUND, EUROPE CAPITAL APPRECIATION
FUND, JAPAN FUND, PACIFIC BASIN FUND, EMERGING MARKETS FUND, SOUTHEAST ASIA
FUND
Brown Brothers Harriman & Co.
Boston, MA
CANADA FUND, LATIN AMERICA FUND
FIDELITY INTERNATIONAL EQUITY FUNDS
Canada Fund
Emerging Markets Fund
Europe Fund
Europe Capital Appreciation Fund
Diversified International Fund
International Growth and Income Fund
Japan Fund
Latin America Fund
Pacific Basin Fund
Southeast Asia Fund
Overseas Fund
Worldwide Fund
CORPORATE HEADQUARTERS
82 Devonshire Street
Boston, MA 02109
1-800-544-8888
THE FIDELITY TELEPHONE CONNECTION
MUTUAL FUND 24-HOUR SERVICE
Account Balances 1-800-544-7544
Exchanges/Redemptions 1-800-544-7777
Mutual Fund Quotes 1-800-544-8544
Account Assistance 1-800-544-6666
Product Information 1-800-544-8888
Retirement Accounts 1-800-544-4774
(8 a.m. - 9 p.m.)
TDD Service 1-800-544-0118
for the deaf and hearing impaired
(9 a.m. - 9 p.m. Eastern time)
* INDEPENDENT TRUSTEES
AUTOMATED LINES FOR QUICKEST SERVICE
BULK RATE
U.S. POSTAGE
P A I D
F I D E L I T Y
INVESTMENTS
(registered trademark)
P.O. Box 193
Boston, MA 02101
INT-06-94S
